House to Take Up Pay Ratio Repeal, Proxy Advisory Reform Next Week

June 02, 2017

The Financial CHOICE Act, which includes the HR Policy-supported repeal of the Dodd-Frank Pay Ratio as well as a comprehensive regulatory regime for proxy advisory firms, is scheduled to be debated in the full House of Representatives next week.  Consideration of the bill (H.R. 10), had been delayed by a fierce debate among Republicans over a separate provision capping the fees banks can charge for debit card usage.  However, this week the GOP leadership decided to scrap the provision.  Regarding the executive compensation and relevant corporate governance-related provisions included in the CHOICE Act, it remains to be seen how much attention they will garner in the floor debate alongside the myriad of other issues in the bill.  The Financial Services Committee debate of the bill last month was devoid of any mention of the pay ratio or any other executive compensation aspects, despite intensive partisan battles over changes to the Consumer Financial Protection Bureau among other major financial policy changes.  With a strong Republican majority, the House is considered likely to pass the Financial CHOICE Act, but it would need Democratic support in the Senate to overcome the 60-vote threshold to avoid a filibuster.  In the House Financial Services Committee, no Democratic members supported the bill on final passage.