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Washington Labor & Employment Wire » Corporate Executive Accountability Act of 2010 (“Say on Pay Bill”)

Corporate Executive Accountability Act of 2010 (“Say on Pay Bill”)


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Core Provisions: The Corporate Executive Accountability Act (S. 3049)comprises part of the Democrats’ comprehensive financial regulatory reform package, building on separate legislation previously passed in the House (H.R. 3269). The Act aims to reform executive pay practices by granting shareholders a non-binding vote on executive pay packages and requiring companies to disclose the ratio of CEO pay to median company worker pay in their annual reports. Additionally, the Act would hold executives accountable for failure or fraud by giving regulators and investors the authority to seize bonuses from executives who have engaged in misconduct, and by prohibiting “golden parachute” arrangements for executive who are fired for cause. The Act would also prohibit the executives of publicly listed companies from cashing out all of their vested equity compensation at once in order to encourage long-term corporate viability over short-term profitability practices that encourage excessive risk taking. The Act is sponsored by Sen. Robert Menendez (D-NJ).

Bill Status: The Bill was introduced in the Senate on February 26, 2010 and referred to the Senate Committee on Banking, Housing and Urban Affairs.