Pelosi on Executive Compensation Bill: 'A Critical Step Forward to Reform the Way Wall Street Does Business'

July 31, 2009

Washington, D.C. - Speaker Nancy Pelosi issued the following statement today after the House passed the Corporate and Financial Institution Compensation Fairness Act. It provides shareholders of public companies with an annual vote on the executive compensation plans of companies' top five executives and authorizes federal regulators to proscribe inappropriate or risky compensation practices of financial firms with at least $1 billion in assets. The bill was approved by the House by a vote of 237 to 185.

"Today, Congress today took a critical step forward in our efforts to reform the way Wall Street does business and to prevent a financial crisis in the future that threatens our nation's economic health.

"Providing shareholders with a say on executive pay will enhance accountability, responsibility, and transparency in corporate America. It will help prevent the irresponsible excesses that fostered a Wall Street culture of greed and imprudent risk-taking.

"Requiring financial institutions to disclose their incentive-based compensation structure promotes transparency in the marketplace, and reduces the perverse incentives that sometimes result in oversized bonuses to executives who did not deserve them.

"Empowering financial regulators to prohibit risky bonus practices by financial firms is not only long overdue, but the responsible thing to do for the taxpayers, who have ended up footing the bill for too many corporate excesses.

"Congress will continue to work to provide oversight and strong financial regulatory reform to protect American consumers and taxpayers' dollars."