Shareholder Vote On Executive Compensation Act

Floor Speech

SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION ACT -- (House of Representatives - April 18, 2007)

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Mr. SESSIONS. Mr. Chairman, my amendment would, very simply, 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. Let me give an example of a substantially similar disclosure requirement that every Member of this body understands, because it is already a current practice.

As Federal candidates, we are each obligated to disclose to the Federal Election Commission the name, occupation and amount given from each of our donors. These funds can then be used for FEC-approved campaign purposes. We require this, as well as we create caps for the amount that can be donated over a legislation cycle, because public interest is advanced by letting those who cast votes for their Members of Congress know who funds these campaigns.

My amendment would not limit the amount that can be spent like the FEC does for political contributions on the amount that people or organizations like labor bosses, environmental groups or consumer advocates spend on influencing this new mandatory nonbinding vote.

The purpose of this amendment is not to impede the ability of organizations to influence this vote. If they hold shares in stock, they would be willing to express their desires. The point of this amendment is simply to provide voters, in this case, shareholders, with access to information about who is spending money to influence that vote.

My amendment tasks the Securities and Exchange Commission with setting a de minimis level of spending and with collecting important information about anyone or any organization that spends over that amount to influence this vote, including who is spending the money, what they are spending the money on and how much they are spending to influence the votes of other shareholders. 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. However, their votes would no longer count in this mandatory vote.

My amendment provides an appropriate level of transparency for shareholder elections. And if we believe that voters deserve this information, then we should also be willing to give shareholders this same level of transparency.

I firmly disagree with the Democrat majority, with the underlying premise of this legislation that it is the Federal Government's job to place this nonbinding mandate on private entities, especially because public companies are already empowered to take this shareholder vote if they so choose and because there is no obligation for anyone to own shares in the company if they do not like the way that it is being managed.

I am also confused by the Democrat majority's recent conversion to the merits of democracy in determining an organization's actions. Less than 2 months ago, the same leadership brought to the floor legislation that strips American workers of the right to use a secret ballot to decide whether or not to unionize, and provides for unprecedented intimidation of employees by union bosses under a fundamentally antidemocratic process known as ``card check.''

But if we are going to pass this interventionist legislation, my amendment would be one small step in the right direction towards giving shareholders all the disclosures that they might need to make an informed decision.

Mr. Chairman, I include for the Record a letter of support from the American Shareholders Association that was sent to Speaker Pelosi in support of my amendment.

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Mr. SESSIONS. Mr. Chairman, I appreciate the gentleman from California as well as the gentleman from Massachusetts, who, as the chairman of the committee, has forthrightly come before the Rules Committee, made himself available and is doing so again tonight on the floor.

Mr. Chairman, it is quite simple that this is about transparency, and I think that is what this bill is about. It is about bringing transparency and some clarity to a shareholder, to be able to know a little bit more and to express themselves about what they think about executive compensation.

I disagree with that. But let's add some more transparency and at least say that if someone else is going to become engaged in the effort, other than the individual shareholder, that they be given an opportunity to have to at least register their activities and what they are doing. The Securities and Exchange Commission, just like the Federal Election Commission, has a lot of knowledge about how business works and how transactions work. I have no reason to assume that, let's say, GE, that they would have a shareholder for GE held to some standard of $500 or $1,000 as the gentleman suggests, that some retiree could not influence as many people as they wanted, that they would have to go through a reporting process.

Mr. Chairman, the bottom line is that this should be about doing the right thing, where we would understand who was on what side, what they were attempting to influence and whether they were trying to influence the corporation in some way. I think shareholders should know about that.

I believe that the SEC could forthrightly understand that the size of the company, the size of the mailing and those things that happen would be appropriately determined. Obviously, if you are going to go on TV, that threshold might be less. If you are going to go in the mail, perhaps a different threshold. But what I am suggesting to you is it is not us setting the standard; it is the Securities and Exchange Commission that wants to regulate, in a fair and proper way, the marketplace.

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Mr. SESSIONS. I do thank the gentleman in fairness for giving me the additional minute that they were given.

So I would ask this body to understand today that we might well be passing this bill, but that this amendment process is to bring forward ideas that bring clarity and understanding of transparency. I believe shareholders would also be entitled to know who is attempting to influence them and what those words might be that they choose, rather than just beating up a company. I don't think it is good for anybody in this country to receive a message that might be aimed at someone without full disclosure, without the proper notification about who they were and what their intentions were. This is about transparency. This is about sunlight. This is about doing the right thing that would enhance the bill that is before us today.

Mr. Chairman, I appreciate the opportunity for Mr. Frank to be able to not only forthrightly offer me the time in fairness, I would also like to thank the Rules Committee, of which I have been a member now for 9 years. I understand what we are doing here, and I will say that I appreciate the way this bill has been handled.

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