"Shareholder Democracy" vs. Shareholder Rights
March 13, 2007
Irvine, CA--House leaders are promoting a new measure that would require all public corporations to hold annual shareholder votes to voice approval or disapproval of executive compensation.
"While this measure is being portrayed as protecting the rights of shareholders," said Dr. Yaron Brook, executive director of the Ayn Rand Institute, "it is in fact a violation of those rights."
"If a majority of shareholders wishes to hold an annual vote to voice approval or disapproval of their board's executive compensation decisions, they have long been free to implement such a policy. But most companies and shareholders have judged that such votes are not in their interest, and it is not hard to imagine why--they do not want to give anti-CEO pundits and politicians yet more fuel to grandstand about 'excessive' CEO pay.
"To force shareholders and companies to adopt such policies against their judgment is not to protect shareholder rights, but to violate them wholesale."
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