TEXT OF STORY
SCOTT JAGOW: Here in the states, a bill modeled after a British law may be introduced in Congress this week. The chairman of the House Financial Services Committee wants to give shareholders a say on CEO pay. Ashley Milne-Tyte reports.
ASHLEY MILNE-TYTE: Democratic Congressman Barney Frank says more pay doesn’t necessarily mean better performance.
He says some of the money paid to CEOs like ex-Home Depot head Bob Nardelli, could have been better spent. So he’s introducing legislation that’s similar to a U.K. law.
BARNEY FRANK: The owners of the corporation, the shareholders, should have the right to give their opinion to the board of directors annually on the compensation, but as in England, it won’t be binding on them.
But Peter Wallison of the American Enterprise Institute says such a law would be a mistake.
PETER WALLISON: A shareholder, just like a constituent of a congressman, doesn’t really have a very good idea of what being a CEO or a senior official of a corporation involves.
He says people who aren’t familiar with the day-to-day workings of a company aren’t qualified to weigh in on salary decisions.
In New York, I’m Ashley Milne-Tyte for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.