US House Dems bailout draft has proxy access
WASHINGTON, Sept 23 (Reuters) - A House of Representatives Democratic counterproposal to the Bush administrations financial bailout plan, includes a provision to give shareholders a way to influence the composition of a financial company's board.
According to the draft bill, shareholders or groups of shareholders holding a 3 percent stake in a financial firm that participates in the rescue plan, would be allowed to put forth a proposal to nominate a director -- a concept known as proxy access that corporate America has resisted.
The bill also includes a provision limiting the severance pay of senior executives at participating financial firms.
"A lot of what led to the financial crisis was a lack of director accountability," said Rich Ferlauto, director of pension and benefit policy at the labor group, the American Federation of State, County and Municipal Employees (AFSCME).
It is unclear whether the proxy access or executive compensation provision will be included in a final bill.
Late last year, the U.S. Securities and Exchange Commission restricted shareholder access by allowing companies to exclude proposals for director nominations from corporate ballots.
Top Democratic lawmakers in the Senate and the House voiced disappointment with the SEC's decision as did investor and labor groups such as the Council of Institutional Investors and AFSCME.
Companies, who have kept tight control of what is included in the proxy documents sent to shareholders ahead of annual meetings, contend that proxy access is about unions and special interests trying to gain leverage in company decisions. (Reporting by Rachelle Younglai; Editing by Tim Dobbyn)
