There’s been a lot of news lately about Republican Representative Rick Renzi of Arizona, who is being investigated for covert corruption involving legislative action to promote a land deal in which he stood to benefit. But there’s no need to look in locked file drawers and under rugs for evidence of Rick Renzi’s pro-corruption behavior in Congress. Corruption, the use of power for purposes of self-promotion, occurs every day in corporate America, as corporate executives award themselves ever-more-ludicrous pay packages. Corporate executives even give themselves “golden parachutes” of multi-million-dollar financial awards when they are fired for poor performance. That’s the abuse of power. That’s corruption. Legal corruption, maybe, but corruption nonetheless.
A little more than a week ago, members of the House of Representatives cast a roll-call vote on H.R. 1257. If signed into law, H.R. 1257 would simply permit shareholders in a public corporation — a.k.a. the owners — to cast an advisory, non-binding vote approving or disapproving of executive pay packages. H.R. 1257 would also allow shareholders to vote their non-binding approval or disapproval of Golden Parachutes. Who would not support the idea of the owners of a corporation being able to publicly express their position on executive pay and severance packages? Only those who have an interest in keeping executive pay and severance packages hushed up. Only those who want to hide the extent of executive corruption and the extent of shareholder discontent with that corruption.
Rick Renzi voted against this bill when it came up for that roll call vote. Rick Renzi wasn’t alone, either: a number of conservatives in Congress prioritized self-awarded executive perks above voice for corporate shareholders. Why are so many conservative politicians interested in hushing up executive pay and severance packages? Everyone has their rea$on.
Thankfully, there were enough progressive votes to counter the pro-corruption Renzis in Congress and pass the bill. Hopefully, it will pass the Senate as well. But then it will have to pass across the desk of President George W. Bush, who has repeatedly sided with corporate executives and against shareholders, workers, and consumers. All the good work of a progressive Congress on corporate governance can be negated with the stroke of a regressive president’s pen. And that’s another reason we need to make sure we vote for a progressive president in 2008.
Yeah, but they’re non-binding resolutions. If I were in Congress, I’d consider voting against this bill, just on the grounds that it’s a useless piece of propaganda meant to give the Democrats some corporate reform to point to.
Real corporate reform would be a bill to let stockholders actually overrule the board.
Well, I don’t know. To clarify: the bill itself is not a non-binding resolution. The bill is written as a binding law that would establish a system in which shareholders make non-binding votes. While I agree with you that binding votes would be more directly useful, I think the production of this sort of information has its own appeal. Imagine reporters and citizens being able to mine corporate reports to find out what share of Corporation X’s shareholders formally objected to an executive pay package or golden parachute before it went through, or was turned down. This is actually useful propaganda, because it can be used as a specific way to point to a corporation’s responsiveness to its shareholders, or its non-responsiveness as the case may be. I think that could have a pretty reasonable impact.