Mr. Chairman, I offer an amendment. I want to thank the chairman of the committee for his kindness in allowing appropriate amendments within committee. Mr. Chairman, I had hoped that this would be an absolutely open rule on the floor of…
Mr. Chairman, I offer an amendment.
I want to thank the chairman of the committee for his kindness in allowing appropriate amendments within committee.
Mr. Chairman, I had hoped that this would be an absolutely open rule on the floor of the House, but it seems that this is as open as we get in this Congress, and I appreciate the opportunity to present an amendment or two on this important bill. This is an important debate that we are having.
If you look at the backdrop for it, it is important to appreciate the history of what is happening in many of our business sectors in this Nation. Seventy-five percent of the IPOs in the world are not in the United States. There is a reason for that. The number of public companies converting to private increases daily, and there is a reason for that. The number of U.S. companies looking to move offshore is increasing, and there is a reason for that.
As it relates to this issue in 2006, the Securities and Exchange Commission adopted sweeping changes to the rules regarding disclosure of compensation paid to executive officers and directors of public companies. This amendment, my amendment, amendment No. 9, simply states that the disclosures of executive compensation adopted by the Securities and Exchange Commission in 2006 provide a complete and adequate mechanism for shareholder approval.
SEC rules approved last summer direct companies to publish a table showing executives' total compensation, designed to bring better disclosure to shareholders. Companies must also detail stock option grants. The centerpiece of it was a single pay number, a single pay number meant to replace a jumble of charts and tables that appear now in proxy statements sent annually to investors. The single number will combine salary and bonuses and perks and other compensation awarded in a given year, with details for each component provided in a summary composition table.
Publicly traded corporations compete for the trust of investors, and these votes that have been proposed in the underlying bill can already be arranged for today if the corporations feel they are warranted as illustrated by AFLAC's recent nonbinding shareholder vote on executive compensation.
Now, if investors become displeased with a board of directors, then they have several choices available to them. They can seek to elect different board members. They can sell their stock and shift their investments to other companies whose corporate governance and decisions are more to their liking, or they can ask the government to expand regulation.
Regrettably, it is this last option that we are faced with today. Further, regulation from Congress is rarely the answer, and it certainly is not now.
I would ask my colleagues to seriously consider this amendment. My amendment is a vote for transparency. It is a vote for disclosure over increased government expansion and regulation. A vote against this amendment will increase the incentives for companies to go from public to private and to move from onshore to offshore.
I will close by saying this. Most Americans have a general sense that some CEOs have levels of pension that are greater than warranted by merit. They know that there must be a correction. They also know well that Washington should not be the author of that correction.
I urge adoption of my amendment.
Mr. Chairman, I thank the gentleman for yielding; I appreciate that. And I appreciate my good friend from Oregon being so transparent in his truth as he made a very interesting argument for more regulation and the fixing of CEO salaries. Which is remarkable, Mr. Speaker. The mischaracterization of this amendment is extremely curious.
The chairman of the committee says this amendment is superfluous, it is not necessary. Well, it is absolutely vital. And the reason it is vital is because it is important for us to say that we believe it is appropriate, the action that has been taken by the Securities and Exchange Commission as it relates to CEO compensation and the disclosure requirements. That is important, because it is important for us as a Congress to say we condone and appreciate the work that the administration, the executive branch is doing in this area. It is also important because it draws attention to the issue and says to the American people, educates them to what is now available to them as shareholders.
My good friend from Oregon says that this isn't mandatory. Well, it is mandatory. The bill states it is mandatory. There isn't any way out of it. It is Congress inserting itself into the functioning in very specific ways of corporations. And, Mr. Chairman, I don't know about your constituents, but my constituents know that that is the last place they want Congress, I promise you that.
My good friend from Oregon states that the vote is fixed, it is not really a vote. Well, if he truly believes that, then why on Earth would he support the underlying bill? If the vote is already fixed, why support the underlying bill? It doesn't make any sense.
So I would also just highlight for Congress and for anyone who is a shareholder that the opportunity for these kinds of votes already exists within the structure of corporate governance right now, within the structure of shareholder rights, as was demonstrated by a good company from Georgia, AFLAC, who went ahead and already has these nonbinding shareholder votes. But there is a difference between having individuals in the private sector, shareholders and individuals outside of the mandating of government to have it occur and have government come in with its heavy hand and say, this is exactly what you need to do because we know best.
Mr. Chairman, in my district I believe that my constituents know better how to act and how to relate to corporations than Washington. And I appreciate the gentleman's time.
Mr. Chairman, I demand a recorded vote.
Mr. Chairman, I move to strike the requisite number of words.
I want to commend the gentleman from Florida for his amendment. I do think that it focuses the attention of this issue where it ought to be.
But I want to address a couple of remarkable misstatements from my friends on the other side. They have said, the gentleman from Oregon said that, I don't want to allow a shareholder vote.
Well, I mean, that is absolutely ridiculous. I am all in favor of a shareholder vote if it is done without the mandate from Washington. That is the distinction that we have here, Mr. Chairman. We have a party that is desirous of increasing regulation and increasing the mandate from government. And we have defenders of a system that allows individuals to act in concert in the way that they best deem appropriate. That is the difference. It is a fundamental philosophical difference.
They believe that mandates from Washington are the solution to this and virtually every other problem. Well, I simply don't believe that. I simply don't believe that, and I know that my constituents don't believe that.
It is also clear from the comments made by my good friend from Oregon that class warfare is alive and well. And that is also something that I think does a disservice to this body, and does a disservice to our Nation, does a disservice to the discussion.
To my good friend, the chairman, he was somewhat astounded by the fact that the gentleman from Illinois and I could think differently, and I appreciate that because the lock-step group on the other side is in full swing. And I understand that. That is all right. But we have an opportunity to think on this side of the aisle. And we have an opportunity to reach conclusions. They may be the same conclusions, they may be different conclusions, but we have an opportunity to think on this side of the aisle. And for that I am appreciative.
What I am only asking for in this bill and in the amendment that I am supporting is to provide the opportunity for the American people to think and to act for themselves without the mandate, without the dictates from the Federal Government.
So I urge my colleagues to support the amendment of the gentleman from Florida.
Mr. Chairman, I offer an amendment.
Mr. Chairman, I think that this amendment gets to what the consequences of this underlying bill are. Now, we have heard some contradictory information from the proponents of this bill. Some say it doesn't mean anything. Some say it is very important and that the consequences are remarkable.
I would suggest that, frankly, we don't know what mandating to companies and to publicly traded companies in this Nation, what this bill will do. I don't think that we, as Congress, know. I think the consequences may be remarkable and significant.
I do know that it would be helpful and appropriate for all of us to have that information, to have the information about what the unintended consequences of this might be. So this amendment is an amendment to address that. It would ensure that this legislation will not compromise fair competition and a level playing field for publicly traded companies. The amendment would require the SEC, the Securities and Exchange Commission, to conduct a study to determine whether a separate nonbinding vote, what the bill mandates, whether or not that would hinder a publicly traded company's ability to compete for the best available candidates for its officers and directors.
It would make sense that it would be helpful for us and for the Nation to know whether or not that would be a consequence. If, in fact, the SEC finds that the rules would hamper the company's ability to compete for the best candidates, then the nonbinding shareholder vote will not be required.
For every publicly traded company, there are thousands of privately held firms. Large privately held corporations compete with publicly traded corporations for the same talent pool of CEOs and, presumably, pay the same compensation levels. Responsibility, our responsibility dictates that we don't add yet another reason for companies to list on foreign exchanges or otherwise be discouraged from becoming publicly traded.
So this is a very simple amendment, provides for a study that would determine the consequences in terms of whether or not publicly traded companies would be able to attract the best talent. I urge my colleagues to support it.
Mr. Chairman, will the gentleman yield?
Mr. Chairman, I appreciate the gentleman for yielding.
Given that it has that implementation date, which I think is appropriate, and given that my amendment asks for a study for a period of 90 days, is there any reason why the gentleman would oppose the amendment?
Mr. Speaker, I demand a recorded vote.