House Passes Bill to Improve Corporate Accountability

The House recently passed HR 1257, the Shareholder Vote on Executive Compensation Act, which will improve the accountability of corporations to its shareholders without micromanaging the business. It accomplishes this by empowering shareholders to hold a non-binding vote on a company’s executive compensation packages.  Executive compensation has skyrocketed in recent years and has begun to have a significant impact on corporate profits and shareholder returns.  This bill improves the accountability of companies to its shareholders, which will improve the functioning of our free market economy.

The Shareholder Vote on Executive Compensation Act is first and foremost a bill to promote the well being of the free market and American corporations.  We have all seen case after case of executives receiving lavish compensation packages while their companies lose money.  We have also seen how the promise of such compensation can provide the impetus for executives to manipulate earnings or arrange unwise mergers or acquisitions.

Companies should be accountable to their shareholders.  This excellent bill will make these companies more transparent for shareholders, and will therefore improve the functioning of the companies themselves and our economy as a whole. 

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