US Law
See also: United States corporate lawIn the Dodd–Frank Wall Street Reform and Consumer Protection Act §951, a new say on pay provision was introduced.
There had been several recent efforts to require Say on Pay resolutions in the United States. In 2007, the Chairman of the Financial Services Committee Rep. Barney Frank sponsored legislation that was passed by the House of Representatives, giving shareholders a non-binding vote on executive compensation. Then Senator Barack Obama authored a "Say on Pay" proposal, but his legislation stalled in the Senate.
The economic crisis has affected corporate governance in the United States of America. The Emergency Economic Stabilization Act of 2008 (EESA), which established the Troubled Asset Relief Program, required say on pay resolutions at companies with outstanding funds from the TARP. In the American Recovery and Reinvestment Act of 2009, Senator Chris Dodd amended Section 111 of the EESA, and updated policy on Executive Compensation in Section 7. The amended legislation continued the "Say on Pay" policy established originally in the EESA.
On February 4, 2009, Treasury Secretary Timothy Geithner stated that companies that have received exceptional financial recovery assistance from the TARP fund would have to subject executive compensation to "Say on Pay" resolutions. On June 10, 2009, Secretary Geithner stated that the Administration supports "Say on Pay" legislation, and it would authorize the SEC authority to implement "Say on Pay" regulations at all companies, not only those that have outstanding funds from the TARP, contingent on Congressional approval. Additionally, the Treasury reconciled its proposals from February 4 with Congressional amendments to the EESA in the Final Interim Rule on TARP Standards for Compensation and Corporate Governance.
On July 31, 2009, H.R. 3269, the "Corporate and Financial Institution Compensation Fairness Act of 2009" passed the House of Representatives. The House bill included a section that allowed for a 'say on pay' for all public institutions in the United States. Additionally, it had a provision for a shareholder vote on golden parachutes. In the Senate, Senator Charles Schumer had introduced the Shareholder Bill of Rights. The House and Senate bills were reconciled in a final bill that was signed by President Obama on July 21, 2010 called The Dodd–Frank Wall Street Reform and Consumer Protection Act.
In 2012, only about 3% of executive compensation packages failed to be approved.
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