Corporate Governance

Specifically, the bill calls for (i) a ?Say on Pay? vote on executive compensation, which will give the shareholders of all public companies an annual nonbinding vote on executive pay; (ii) a rule allowing longtime 1% owners of public companies the ability to nominate director candidates using the company?s own solicitation materials; and (iii) new exchange-listing requirements, including the requirements that company directors be elected by a majority of shareholders, that companies eliminate classified board structures, that every public company have an independent Chairman, that the positions of CEO and Chairman be separated; and that companies establish risk committees comprised of independent directors to evaluate risk management practices.

While the Shareholder Bill of Rights is certain to provoke heated debate in Congress, it has already garnered the support of roughly twenty major pension funds, labor unions, and consumer groups, according to Securities Law 360.  And we certainly applaud any reform effort that gives shareholders a strong voice in the corporate boardroom.  Like many of the other pieces of legislation introduced this year, the Shareholder Bill of Rights makes a strong statement about shareholders? rights:  that they belong to shareholders, and that shareholders? long-term interests should come before managements? short-term gain.