Monday, April 23, 2007 | 7:36 a.m.
Legislation would allow shareholders to offer advice on how much to pay top executives
In response to outrage about exorbitant compensation received by some chief executives, the House has approved legislation that would let shareholders of publicly held companies cast advisory votes on executive pay packages.
Under the measure introduced by Rep. Barney Frank, D-Mass., corporations would be required to poll shareholders every year on executive pay and so-called golden parachute severance packages for outgoing executives . Shareholders' votes would be non binding and advisory , which means corporations could pay executives whatever they wish, even if shareholders opposed the amount.
Nonetheless, chief executives opposed the legislation, saying such a symbolic vote on the part of shareholders would be distracting and waste time and money.
But as a story by Reuters news service notes, the average U.S. chief executive in 2003 earned about 500 times the amount paid to the typical American worker. That is substantially higher than in 1991, when the average CEO's salary was 141 times higher than the typical worker's.
Executives should be paid what they are worth, but it also is fair to give investors a voice in discussing executive pay.
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