Requiring publicly traded companies to allow shareholders to cast non-binding votes on compensation packages for top executives beginning in 2009 (H.R. 1257)/Motion to recommit with instructions to clarify the nonbinding nature of the vote
house Roll Call 243 Apr 20, 2007
This vote represented Republicans' last attempt to modify a bill requiring publicly traded companies to allow shareholders a say in the compensation packages of top executives. Rep. Tom Feeney (R-Fla.) moved to recommit the bill with instructions, which would have sent the legislation back to committee in order to be amended to include language clarifying the nonbinding nature of the shareholder votes on executive pay.
The legislation Republicans were seeking to alter would require that all publicly traded corporations conduct annual nonbinding advisory votes on the compensation of their executives beginning in 2009. A company's board of directors could disregard the shareholders' say, but supporters of the bill, including Financial Services Chairman Barney Frank (D-Mass.) said that was unlikely.
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.
Frank said repeatedly during the debate that "'This bill does not do what it does not do,'" meaning that the shareholder vote would be strictly advisory.
"I hope he is right," Feeney said. "Rather than hope, though, I offer this motion to recommit in order to be certain and to protect the directors in their discretionary exercise of their duties."
More specifically, Feeney said he wanted to make sure that no court would consider a board of director's refusal to follow the shareholders' advisory vote as a breach of the board's duties.
He added that he didn't care if the provision was redundant. "We do a lot worse here than redundancy. As Chairman Frank often advises, the law is filled with redundancies, and when Members oppose language in language in bills because they are redundant, they are typically being disingenuous."
Frank responded that "never has the willingness of the minority to abuse the process for purely political ends been truer than today," pointing out that Republicans had offered seven amendments to the bill under what's known as an open rule (meaning no relevant amendments were barred) and that very similar language to Feeney's was already in the bill after Rep. Chris Shays (R-Conn.) successfully added it in committee.
A motion to recommit with instructions is the minority's last chance to make substantive changes to a bill before a final up-or-down vote on the measure. It is usually offered during legislative debates under what are known as closed rules, meaning few or no amendments are allowed.
Frank continued: "If the Members thought that the bill that we had voted on and which they had every chance to amend needed further amendment, the democratic procedure, the procedure that shows respect for the process, would have been to file an amendment. Members on the other side had every opportunity at the committee and in this open rule fully to debate this and to offer amendments. They chose not to. They chose instead to legislate by ambush."
Majority Democrats were unanimous in their opposition to the motion to recommit, while all but one Republican voted for it. Thus, on party-line vote of 184 to 222, the House rejected a Republican attempt to send legislation requiring publicly traded companies to allow shareholders a say in the compensation packages of top executives back to committee with instructions to clarify that such votes would be nonbinding, and the legislation moved towards a final vote without the provision.
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