Steve Grossman strongly supports the "Say on Pay" bill sponsored by Rep. Barney Frank and passed by the U.S. House in July. The measure would empower shareholders to cast advisory votes on corporate executive pay and "golden parachutes," provide greater independence for corporate compensation committees, and provide regulatory tools to deal with compensation schemes that endanger a company's financial health.
It has been estimated that average CEO compensation in 2003 was 500 times that of the average worker, escalating from 140 times worker pay only 12 years earlier. This is contrary to the principles of economic fairness that have been cornerstones of American values and prosperity.
Steve will use the Commonwealth's position as a major investor to oppose corporate greed and push for more transparency and accountability. He also is committed to ensuring that the state's pension funds will use their voting power to press for binding pay resolutions rather than simply advisory measures. The lesson of the corporate abuses and misjudgments of the last decade -- which have taken a terrible toll on the economy and the public -- is that corporate power, like all power, cannot go unchecked.
Overall, Massachusetts pension funds and other investment vehicles have not been national leaders in pressing for reform of corporate governance -- to the point where private investment institutions are doing more to look after shareholder interests than the Commonwealth. Steve Grossman will use the Commonwealth's clout as a major stockholder to ensure that corporate decision-making makes sense from both a business and a public interest perspective.