Requiring publicly traded companies to allow shareholders to cast non-binding votes on compensation packages for top executives beginning in 2009 (H.R. 1257)/Rep. Pete Sessions (R-Texas) amendment to prohibit shareholders' votes from being counted if they spent money trying to influence the votes of others without disclosure
house Roll Call 236 Apr 20, 2007
This vote was on an amendment to a bill requiring publicly traded companies to allow shareholders a say in the compensation packages of top executives. Proposed by Rep. Pete Sessions (R-Texas), the amendment would have prohibited a shareholder's vote from being counted if the shareholder spent more than a minimal amount of money trying to influence the votes of others and did not fully disclose those activities to the Securities and Exchange Commission (SEC).
The legislation Sessions was seeking to amend would require that corporations conduct annual nonbinding advisory votes on the compensation of their executives beginning in 2009. The impetus for the bill was a growing concern among lawmakers as well as many economists that the widening discrepancy between pay for executives and working- and middle-class Americans was harmful for both the economy and social mobility.
Sessions described his amendment as a way to provide "sunshine and transparency for shareholders so that there is full disclosure about who is financing efforts to influence their vote on this new congressionally mandated, nonbinding shareholder resolution."
He said the purpose was not to impede the ability of organizations to influence the shareholder votes on executive pay but simply to provide everyone with access to information about who is spending money to influence that vote. The amendment would prompt the SEC to set a minimum spending threshold that would trigger the disclosure requirement.
"If an individual wants to spend more than this de minimis amount and not disclose their identity to shareholders, they are still perfectly able to do so," Sessions continued, saying that their votes simply would not count.
Rep. George Miller (D-Calif.) said the amendment was designed to close down public discourse and conversations between shareholders about executive pay. Miller said Session's amendment would effectively silence individuals who donate money to a campaign aimed at swaying non-binding votes on executive pay.
"So what you are really doing here is, you are trying to chill the speech and freeze the speech by putting them and holding them responsible for the disclosure that they may not have any control over," Miller said. "They may know they just don't like that executive compensation or they want a discussion of it. They don't necessarily know the activities engaged in to influence the vote."
After Miller's lengthy discourse opposing the amendment, Rep. Barney Frank (D-Mass.) responded with a two-sentence observation about Republicans' definition of democracy, which, he said, "has recently frequently included throwing votes away."
To which Miller responded: "You mean those 13,000 in Florida that are missing?" referring the disputed results from the 2000 election.
Democratic opposition to Sessions' amendment was nearly unanimous. All but two Democrats voted against it, and all Republicans present but three voted for it, not enough to muster a majority. Thus, on a party-line vote of 177 to 222, the House rejected an amendment prohibiting shareholders' votes from being counted if they spent money trying to influence the votes of others without disclosure, and legislation requiring publicly traded companies to allow shareholders to cast non-binding votes on compensation packages proceeded without the provision.
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