Money Rules

The Obama Administration seems to have backed off its notion of setting specific limits on executive compensation at firms that have accepted lots of federal swag, at least according to this article. I think having a cap is silly — most “one size fits all” ideas are — but I think the notion that allowing annual, non-binding shareholder resolutions is going to have a broad and meaningful impact on executive compensation practices is a pipe dream.  Why saddle American companies with the requirement of preparing and sending out what will no doubt be mind-numbingly detailed disclosure statements on executive compensation, simply because some agenda-driven shareholder thinks voting on the compensation issue will send some kind of message?  Shareholder votes and the attendant disclosures can be expensive and may give rise to litigation. Why create another  another unnecessary expense simply to allow an annual non-binding vote on a complex topic by shareholders, the vast majority of whom will not take the time to read or understand the disclosure materials anyway?

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