Rep. Barney Frank, D-Mass. and chairman of the House Financial Services Committee, told CNBC’s “Squawk Box” that a bill requiring publicly held companies to hold advisory votes on executive pay is a “moderate” piece of legislation and would cause no harm.
“I find it hard to imagine that a board of directors would ignore (a shareholders’ vote), but they may feel there are special circumstances,” Frank said Friday. “It doesn’t take away the right of the board to make the final decision, but we think this would be a significant influence.”
The House of Representatives is expected to vote Friday on a bill that would let shareholders cast non-binding votes on pay for top executives. There is no similar bill in the Senate so it’s unlikely that a “say on pay” bill will become law this session.