Friday, April 27, 2007

Walberg Opposes Empowering Shareholders

Suppose you were an average, ordinary worker at an average, ordinary company. Maybe you are. How much do you think you'd be making per year? $25,000 each year? $35,000? $45,000?

What if you were making $184,000? Wouldn't that be incredible? Well, yes. But while all of us could use the money, it would probably be more than an average, ordinary job really deserved. But that would be what you could make, if the rate at which employee pay increased over the last 25 years was the same rate that CEO pay increased at. As the Milwaukee Journal Sentinel reported a few years ago, the average pay rate for those in charge of the top American corporations has gone from $479,000 to $8.1 million over the last 25 years.

Is that a little ridiculous? Are executives overpaid? I would say yes. But then, I'm not a CEO.

Now, are you a shareholder in a major American corporation whose CEO has received a ridiculously high paycheck? Wouldn't it be great if you could have some sort of voice in the matter?

That's what HR 1257, the "Shareholder Vote on Executive Compensation Act" would do. It would allow those that own stock in a company to have an advisory vote on these sorts of matters.

The bill passed, 269-134. Fifty-five Republicans joined the vast majority of Democrats in supporting the bill.

Needless to say, Congressman Tim Walberg voted No. Joining him were Michigan Republicans Thad McCotter and Mike Rogers.

It's clear that the Club for Growth made a good investment. It's just too bad the residents of Michigan's 7th District will never see the dividends.

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30 Representatives skipped that vote. It must have been pretty contentious.

I don't like the idea of this bill either. Why would we require corporations to ask their shareholders if they want to offer an opinion on executive pay? The market sets executive pay and shareholders affect the market by investing in or selling off stocks.

The sponsor of the bill was Barney Frank. I like it when he is on Bill Maher's tv show, but I rarely agree with his ideas.
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