Congress considers executive pay rules

NEW YORK — A report showing that banks paid employees billions of dollars in bonuses last year despite needing government bailouts to survive is ramping up the pressure on Congress to rein in executive compensation.

The House of Representatives is scheduled to vote today on a pay-reform bill, which includes a so-called say-on-pay rule that would give shareholders the right to vote on corporate pay packages. But many are skeptical the measure would reduce compensation or even prevent it from continuing to skyrocket.

Say-on-pay votes would be nonbinding, would take place months after compensation is handed out and wouldn't force companies to alter the payouts. At the roughly two dozen U.S. companies that have voluntarily implemented say-on-pay in the last two years, shareholders never have voted down a pay package.

Motorola Inc., for example, made its new co-chief executive one of the highest paid U.S. executives last year with total compensation of more than $17 million. A leading shareholder activist firm recommended that investors vote against the Motorola package, saying it was laden with "excessive perks."

But it passed anyway, by an almost-two-thirds vote.

Even supporters of say-on-pay concede its shortcomings and say it would make only a minor dent in the years-long effort to restrain corporate paydays. Still, Paul Hodgson, a pay expert at the Corporate Library, said say-on-pay is a step forward because it forces companies to consult investors about compensation, something they should do anyway but don't.

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