Bush, House GOP Side with CEOs Over Shareholders

This afternoon the House of Representatives held an important vote on legislation that would, for the first time, allow shareholders of corporations to at least have a say in the salaries given to executives. While the legislation did not give shareholders veto power, the power to make a statement of approval or disapprobation could go a long way towards reining in excessive CEO pay -- particularly in cases in which corporations are hemorrhaging money but executives still receive fat paychecks and ridiculous bonuses.

Yet on this sensible piece of legislation, how did most House Republicans vote? Nay, naturally. Of the 184 memberds of the House Republican caucus who voted on this bill this afternoon, fully 70 percent (129) voted in the opposition. This group not only included members of the leadership, like Minority Leader John Boehner and Minority Whip Roy Blunt, but also potentially endangered members, including (and I got a lot of them, but certainly not all of them): Vern Buchanan (FL-13), Mike Castle (DE-AL), Tom Davis (VA-11), John Doolittle (CA-04), Phil English (PA-03), Vito Fossella (NY-13), Scott Garrett (NJ-05), Peter King (NY-03), Randy Kuhl (NY-29), Tom Latham (IA-04), Thad McCotter (MI-11), Dave Reichert (WA-08), Rick Renzi (AZ-01), Tom Reynolds (NY-26), Mike Rogers (MI-08), Jean Schmidt (OH-02), Chris Shays (CT-04), Tim Walberg (MI-07) and Heather Wilson (NM-01).

But it's not only the House Republicans, including some of their most vulnerbable members, who are staking out a position against the average shareholder and in favor of corporate CEOs making tens or hundreds of millions of dollars each year (even as some of their companies lose money). Today we learned that the White House also opposes such a move by Congress to empower everyday Americans to take real ownership over their investments, just as the extremely wealthy are able to do. While the President has apparently stopped short of issuing a veto threat, it has nonetheless indicated quite clearly to the American people just whose side it's on.

Judging by the vote in the House today, Democrats could be within fewer than 10 votes of a veto-proof margin in the House (if you count the dozen or so Democrats not voting as "ayes"). Now action will move to the Senate where the corporatists up for reelection in 2008 -- the John Sununus, Gordon Smiths, Norm Colemans and others -- will have to decide whether they care more about appeasing their big-money supporters or the people who will actually have more of a say as to whether or not they will have another term in Congress. My guess is that most of these endangered Republicans, just like their brethren in the House, are dense enough to believe that they can get away with voting for corporate CEOs and against the average shareholder, but we shall have to wait and see.

Tags: 110th congress, AZ-01, CA-04, CEO Pay, CT-04, DE-AL, FL-13, George W. Bush, IA-04, MI-08, MI-11, NJ-05, NM-01, NY-03, NY-13, NY-26, NY-29, OH-02, PA-03, Republicans, Shareholders, VA-11, WA-08 (all tags)

Comments

9 Comments

Re: Bush, House GOP Side with CEOs Over Shareholde

Allowing shareholders a vote on CEO pay is actually a very capitalist thing to do. Shareholders have a percentage ownership share of corporations, they are the CEOs' partners and should be treated as such. The CEO is being hired to manage assets owned by the shareholders. If they are doing a poor job for a company's owners, the owners should be able to say so. But the Republicans want donations from corporate managers who want to be free to loot corporate assets regardless of how well they perform. It is that simple.

by sunlight7 2007-04-20 01:26PM | 0 recs
Re: Bush, House GOP Side with CEOs Over Shareholde
Yes, that makes sense.  Let's get a vote from 3 million shareholders of Exxon and see if we can get a consensus.  
Shareholders vote for the board fo directors.  It is the board that negotiates CEO compensation packages.  So, in essence, shareholders do have a vote on CEO pay.
by totalkaosdave 2007-04-20 02:05PM | 0 recs
Re: Bush, House GOP Side with CEOs

False.

by bruh21 2007-04-20 03:06PM | 0 recs
Re: Bush, House GOP Side with CEOs Over Shareholde

Call me a skeptic on this one. I'm pretty naive about corporate governance, but I say, let each corporation make its own rules. If you're a shareholder and you don't like the rules, you can sell.

by nstrauss 2007-04-20 03:34PM | 0 recs
Re: Bush, House GOP Side with CEOs Over Shareholde

Wonder what Hillary's position on this will be? Edwards? Obama?

Really, I just want to know Hillary's.

by scudbucket 2007-04-20 03:41PM | 0 recs
Re: Bush, House GOP Side with CEOs Over Shareholde

I counted 5 Democratic defections, all from the far right wing of the party (with the exception Boyda).  As someone who puts Hillary pretty far down among the contenders for the nomination, I have no doubt she'd vote for this legislation.

by Ramo 2007-04-21 09:25AM | 0 recs
Re: Bush, House GOP Side with CEOs Over Shareholde

I pleased to see the Congressional Democrats taking a sensible approach on this issue.  The shareholders are the ones damaged by excessive executive pay contrary to a lot of rhetoric.  Corporate board often suffer from severe principle-agent problems.  Allowing the principles to voice there approval or disapproval on the actions of the agents can only serve to reduce the principle-agent problem.

by Monkey In Chief 2007-04-20 04:18PM | 0 recs
Re: Bush, House GOP Side with CEOs

I'm sorry, I'm a shareholder, but like most now a days- it's through my 401k- and I don't have many choices on what stocks the funds buy. I want those fund managers to act in my behalf and not be complicit in a culture of no accountibility and corruption among the hired hands. We are the owners; managers come and go. I also don't like it that managers reduce my dividends by contributing to candidates whose politics I don't like. We need a "Dividend Protection Act" that wouldn't allow companies to sell publio shares, unless the owners can opt out of having that taken from their dividends. If the management wants to contribute, let it come from their own pockets.

by Skipster 2007-04-21 12:35PM | 0 recs
Re: Bush, House GOP Side with CEOs

I used to have all mutual funds (Pax) and spider-type market averagers, but now I've put some ordinary stocks in my IRA.

I am amazed at what power I don't have as an owner of these companies. I'd love to have a thumbs up or thumbs down on some matters of importance, like giving run-a-company-into-the-ground CEOs like Nardelli tens of millions in firing bonuses.

Of course, my criteria for picking these stocks included whether the company seemed superficially decent, whether its products and services are good stuff I can recommend, and other moral issues, so I haven't had any scummy dreck surface in my companies. But I would like a measure of control over any corporation I (and a few hundred thousand other people) own. That's supposed to be the foundation of capitalism, isn't it?

by joyful alternative 2007-04-21 03:01PM | 0 recs

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