On August 3, the House, led by Representative Barney Frank, passed the Corporate and Financial Institution Compensation Fairness Act of 2009 (H.R. 3269), which applies to public companies and would (i) give shareholders a “say on pay” by providing a nonbinding, advisory vote on the company’s pay practices for top executives (ii) give shareholders a nonbinding, advisory vote on “golden parachute” compensation in connection with a proxy filing for a change in control, (iii) provide for greater ind
United StatesCorporate/Commercial Law
On August 3, the House, led by Representative Barney Frank,
passed the Corporate and Financial Institution Compensation
Fairness Act of 2009 (H.R. 3269), which applies to public
companies and would (i) give shareholders a "say on pay"
by providing a nonbinding, advisory vote on the company's pay
practices for top executives (ii) give shareholders a nonbinding,
advisory vote on "golden parachute" compensation in
connection with a proxy filing for a change in control, (iii)
provide for greater independence of compensation committees and
their consultants and advisors and (iv) add additional reporting
and compensation limitations to financial institutions with assets
over $1 billion. The Securities Exchange Commission (the
"SEC") could exempt certain smaller public companies from
the "say on pay" provisions. The bill will now move to
the Senate.
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