Steven Kaplan Testifies Before House Financial Services Committee

The House Financial Services Committee is considering legislation requiring public companies to let shareholders vote on the pay packages of top officers. At a hearing on Capitol Hill, March 8, 2007, Steven Kaplan, Neubauer Family Professor of Entrepreneurship and Finance, testified on The "Shareholder Vote on Executive Compensation Act." Kaplan, who studies corporate governance, is quoted in the Wall Street Journal as pointing out that “The regulation,  criticism, and hounding of public-company CEOs may have a major cost.  CEOs can and will leave public companies to do something else. And it is the better CEOs who will tend to do so.”

The proposed legislation does not call for pay limits. It does seek to require public companies to include in their annual proxies a non-binding advisory shareholder vote on their executive pay plans.

Read Kaplan's testimony