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Press Release For Immediate Release: October 24, 2006
DEMOCRATS RELEASE REPORT ON CEO PAY AND ITS IMPACT ON RANK-AND-FILE WORKERS Republicans Oppose Democratic Effort to Give Shareholders the Power to Stop Executive Compensation Abuses Washington, DC– Democrats today released a report comparing the significant growth of CEO perks and pay in the Bush economy to the decline of wages, pension benefits and health benefits experienced by the vast majority of American workers. The share of company profits consumed by the top five executives of public companies increased from 5% in 1993 to 10% in 2003—in addition to hurting shareholder returns, this dramatic increase in executive compensation has had a detrimental effect on America’s rank-and-file workers. While Democrats have worked to give shareholders greater transparency of pay packages for executives and the power to put an end to the abuses of executive compensation, Republicans have opposed these efforts at every stop. “At a time when we have stagnant wages and workers are being asked to carry a greater burden of their health care and retirement responsibility it is amazing to me that executive pay continues to increase at extraordinary levels,” said Congressman Frank, the Senior Democrat on the House Financial Services Committee. The report prepared by Democratic Financial Services Committee Staff details how wages, health and retirement plans for workers have suffered, while benefits for executives continue to be increase. In fact, real wages for the vast majority of American workers have fallen since 2001, while executive pay over the past five years has soared. Click here to read the report. In November of 2005, Congressman Barney Frank, the Senior Democrat on the Financial Services Committee, introduced H.R. 4291, “The Protection Against Executive Compensation Abuse Act.” The bill would not establish any artificial restrictions on executive compensation, but rather establishes a “market-based” approach that empowers shareholders to review and approve their company’s comprehensive executive compensation plan. The bill also allows for a company policy for recapturing any form of incentive compensation, such as when the company pays bonuses/grants stock options to executives for meeting performance targets only to later learn that these numbers were inaccurate and must be restated. While the bill is supported by a large number of Democrats, not a single Republican has signed on as a co-sponsor of the bill. Republican leadership has denied any debate on the bill. In fact, if only three Republican members of the House Financial Services Committee were to join the effort to help shareholders there would be enough support to force committee consideration of the bill. Not a single Republican member of the committee has come forward to do so.
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The Committee oversees all components of the nation's housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities. The Committee continually reviews the laws and programs relating to the U.S. Department of Housing and Urban Development, the Federal Reserve Bank, the Federal Deposit Insurance Corporation, Fannie Mae and Freddie Mac, and international development and finance agencies such as the World Bank and the International Monetary Fund. The Committee also ensures enforcement of housing and consumer protection laws such as the U.S. Housing Act, the Truth In Lending Act, the Housing and Community Development Act, the Fair Credit Reporting Act, the Real Estate Settlement Procedures Act, the Community Reinvestment Act, and financial privacy laws. |
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