On August 3, the House, led by Representative Barney Frank, passed the Corporate and Financial Institution Compensation Fairness Act of 2009 (H.R. 3269), which applies to public companies and would (i) give shareholders a “say on pay” by providing a nonbinding, advisory vote on the company’s pay practices for top executives (ii) give shareholders a nonbinding, advisory vote on “golden parachute” compensation in connection with a proxy filing for a change in control, (iii) provide for greater independence of compensation committees and their consultants and advisors and (iv) add additional reporting and compensation limitations to financial institutions with assets over $1 billion. The Securities Exchange Commission (the “SEC”) could exempt certain smaller public companies from the “say on pay” provisions. The bill will now move to the Senate.
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