Dodd-Frank: financial regulation in neutral
Greater shareholder rights?
Dodd-Frank has authorized financial regulations giving stockholders the power to shape the companies in which they invest. One such rule gave stockholders the right to nominate corporate board members, known as "proxy access."
"Dodd-Frank just confirmed that the SEC has the authority to promulgate a rule requiring public companies to allow investors to put their own nominees for the board on the ballot," says Robert Jackson, associate professor at Columbia Law School in New York.
The Securities and Exchange Commission wrote the shareholders' rule only to have it challenged in court by the Business Roundtable, a corporate lobbying group, Jackson says. Business Roundtable won the case, forcing regulators to go back to the drawing board.
Another unfinished rule governs executive pay. While the "say on pay" rule requiring shareholders to approve executive salaries and "golden parachute" benefits has gone into effect, a rule requiring companies to "claw back" executive compensation in the event earnings are overstated hasn't.