Despite tough talk from presidential hopeful Senator John McCain that he favors shareholder oversight of executive pay, spokesperson Brian Rogers late last week declined to clarify McCain’s position on a bill sponsored by rival Barack Obama. The legislation would arm shareholders with an advisory vote on executive compensation, often referred to as “say on pay.” Nor would the McCain camp say if the presidential hopeful favors any type of legislation to give shareholders a voice on C-level paychecks.
With presidential campaigns in full swing, Obama and McCain have voiced their dissatisfaction with hefty CEO pay packages. Obama’s Shareholder Vote on Executive Compensation has passed in the House and would likely become law should the Illinois Senator win the election.
Just where McCain stands on say on pay, however, is still unclear. In June, he told BusinessWeek: “All aspects of a CEO’s pay, including any severance agreements, must be approved by shareholders.” That would seem to set an even higher standard than the non-binding advisory vote that Obama’s bill calls for. But despite repeated calls, Rogers would not clarify whether McCain will implement any type of regulatory actions to give shareholders voting rights on executive compensation.
Peter Gleason, CFO and managing director of research for the National Association of Corporate Directors (NACD), says while it is understandable that shareholders are disgruntled at some executive compensation packages, CEO talent is a valuable commodity. “Compensation is so complex, it needs to be understood that acquiring talent, retaining it, and motivating it is necessary,” says Gleason.
For now, Obama has clarified his support of say on pay, which many corporate directors oppose. McCain has yet to confirm whether he intends to support Obama’s bill, propose a bill of his own, or oppose legislative action on the issue.