House Panel Approves Bill to Exempt New Firms From Pay Votes – Ted Allen (ISS blog)
February 23, 2012

“On Feb. 16, the U.S. House Financial Services Committee voted overwhelmingly to approve a bill that would exempt newly public companies from holding say-on-pay votes for five years. A similar bill has been introduced in the Senate and has attracted bipartisan support. The House bill, the ‘Reopening American Capital Markets to Emerging Growth Companies Act,’ H.R. 3606, would create a new class of issuers, ‘emerging growth companies’ that would be exempt from the Dodd-Frank Act-mandated advisory votes for five years, or until they reach $1 billion in annual revenue or $700 million in public float. These companies also would be exempt from holding separate shareholder votes on ‘golden parachute’ severance arrangements. …Americans for Financial Reform (AFR), a coalition of consumer and investor groups that includes the AFL-CIO, has urged the Senate Banking Committee to reject the emerging company legislation. The coalition criticized the auditor attestation exemption and noted that say-on-pay votes have nothing to do with eliminating barriers to new IPOs. ‘We strongly oppose this bill, which legitimizes the idea that companies should be allowed to go public and raise money from average, retail investors without being able to meet basic standards designed to ensure that they provide those investors with accurate and reliable information on which to base their investment decisions,’ AFR argued in a Feb. 15 letter.” Click here for more.