Both presidential candidates have voiced concern over CEO pay. Sen. Obama recently sent a letter to Sen. Christopher Dodds (D-Conn.) regarding the Shareholder Vote on Executive Compensation Act, according to The Wall Street Journal. The bill, introduced by U.S. Rep. Barney Frank (D-Mass.), would require that shareholders have a vote on CEO compensation as well as severance packages.
McCain recently denounced those CEOs who have left troubled companies with substantial pay packages, telling Businessweek: “All aspects of a CEO’s pay, including any severance agreements, must be approved by shareholders.” Whether McCain will support Obama’s bill remains to be seen, but what is clear is that both candidates favor shareholder voting rights.
While most corporations would prefer to keep the government out of such business practices, legislation appears liklier. Last summer’s credit-crisis resulted in increased scrutiny over say on pay. Shareholder activists increasingly want CEOs to be held accountable for their performances and be compensated accordingly.
McCain has said action needs to be taken, but so far has not yet committed to supporting Obama’s bill.
Some of McCain’s critics believe his recent support of say on pay is merely an attempt to avoid the image of being a candidate for Corporate America.
Greg Valliere, a chief strategist at Stanford Washington Research Group, which tracks politics for investors, believes McCain could be hurting himself in the long-run. Valliere told BW, “It’s a tightrope he has to walk. He runs the risk of antagonizing the base, and in particular, his contributors.”