June 09, 2017
The House of Representatives approved the Financial CHOICE Act of 2017, which includes the HR Policy Association-supported repeal of the Dodd-Frank pay ratio as well as a comprehensive regulatory structure for proxy advisory firms, by a 233-186 vote largely along party lines. During the floor debate, Speaker Paul Ryan (R-WI) hailed the bill as a necessary scaling back of Dodd-Frank, which he said mandates "more rules than any other Obama-era law." As with the Financial Services Committee debate on the bill, there was very little attention given to the executive compensation provisions. Other issues, such as the bill's treatment of the Consumer Financial Protection Bureau and many community bank reforms dominated the day's debate. In the lead-up to the floor debate, an amendment that sought to strip the pay ratio repeal provision from the CHOICE Act was offered and subsequently withdrawn in the House Rules Committee by Rep. Keith Ellison (D-MN), a staunch supporter of the pay ratio. During the floor debate, Mr. Ellison did not mention the pay ratio. Instead, the mantle was taken up by Rep. Matt Cartwright (D-PA) who lambasted the CHOICE Act for its repeal of the pay ratio--dubbed an elimination of "transparency"—Dodd-Frank section 956, mandating financial services incentive compensation rules, and the hedging disclosure which, according to Mr. Cartwright, allows executives to "bet against their own stock." Despite the successful House vote, the future of the GOP-led Dodd-Frank reform faces significant uncertainty in the U.S. Senate. Republican Majority Leader Mitch McConnell (R-KY) has stated he is "not optimistic" about the prospects of Dodd-Frank repeal due to the slim Republican majority, which means eight Democrat votes will be needed to overcome the Senate filibuster. Despite these uncertainties, the HR Policy Association and its Center On Executive Compensation will continue to press for these reforms in the Senate.