Suggesting a softer, more nuanced approach is needed regarding executive compensation issues, a new group of 36 Fortune 100 companies is setting up an advocacy group in Washington to offer an alternative to the hard-liner Business Roundtable.
Called the Center on Executive Compensation, the group has been formed by the HR Policy Association and aims to help address “say on pay” issues affecting executive pay, according to Finance Week.
The reasons for the new effort are clear: business groups expect a tougher atmosphere on pay issues in Congress and the White House starting next year. That will be especially true if Barack Obama wins the presidency since Obama has introduced a bill called the Shareholder Vote on Executive Compensation Act that would give far greater scrutiny and create more checks and balances about how public firms decide pay issues.
Obama’s bill passed the house in April 2007 but has been stymied because President George W. Bush has vowed a veto. Such won’t be the case next year when the bill is seen as having better chances of passing.
The new Center would work in a more cooperative spirit with unions and institutional investors to take a more centrist approach on CEO pay.
