Government Should Not Force Companies to Hold Shareholder Votes on CEO Pay
April 20, 2007
Irvine, CA--The U.S. House approved a bill today that would force companies to hold yearly shareholder non-binding votes on the pay of their CEOs and top executives.
"While this bill 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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