Reference no: EM131528990

Discussion - Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act

Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires public companies to provide their shareholders with an advisory (non-binding) vote on executive compensation and severance packages, generally known as " say-on-pay" votes.

Proponents of this legislation suggest that, even though the votes are not binding and the final decision on the compensation package is in the hands of the board of directors, those directors are elected by shareholders, and a shareholder vote against a compensation or severance package may exert pressure on directors to reconsider the package and make changes.

Opponents suggest that say-on-pay is more government regulation, still another intrusion into free enterprise, and if shareholders vote on CEO pay, citizens should be able to vote on the salaries of their Congressional Representatives, Senators and the U.S. President.

What's your take on the issue? Your posting should address each of the following:

1. Would you support an amendment to the say-on-pay to make shareholder votes on CEO compensation packages binding? Why or why not? Explain your reasoning.

2. Should U.S. citizens have the ability to vote on compensation packages for top government workers (i.e., Congressional Representatives, Senators and the U.S. President)? Why or why not? Explain your reasoning.