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Forum Report
Rescue Act
Provisions to Be Considered at October 14 Meeting
The “Emergency Economic
Stabilization Act” signed into law Friday afternoon includes provisions
relating to executive compensation that you may want to consider in the
context of issues being addressed in Forum’s “Say on
Pay” program, and that you will have an opportunity to discuss at
next week’s open meeting:
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Differentiating companies
that require increased oversight – The Act’s compensation provisions
apply generally only to the companies that participate in the bail-out, and
also impose greater levels of supervision on the companies that get more
financial support. While it may be inappropriate for us to make any
assumptions about the economic views on which Congressmen based this
approach, it certainly suggests increased governmental receptivity to the
views of many Forum participants who advocate policies that distinguish
successful companies from failures.
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Increased public interest
in fairness of compensation – Whether the Act’s provisions prove to
be effective or not, they evidence a clear public interest in the fairness
of executive compensation. The public servants elected next month in the
current crisis environment can be expected to show great interest in
considering both the marketplace and regulatory means of assuring this
fairness.
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Saving “Say on Pay” for
post-election attention – A proposed provision for “Say on Pay” was
ultimately excluded in the final version of the Act. Some Forum
participants have speculated about this reflected either a political intent
to enact the previous for of the Frank bill in its original, more broadly
applicable form, and others have speculated that Congress will now defer
action until they have a chance to consider the priorities of the economic
turmoil. Being practical, either political direction suggests that Forum
participants focus now on their own decisions about what will benefit the
marketplace.
For those of you interested in a
detailed legal review of the Act’s provisions relating to compensation, the
following memorandum can be downloaded from the Forum web site:
Please let me know if you have any
comments on these or other issues.
GL – October
5, 2008
Gary Lutin
Lutin & Company
575 Madison Avenue, 10th Floor
New York, New York 10022
Tel: 212-605-0335
Email:
gl@shareholderforum.com
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