McCain, Business Leaders Diverge on CEO Pay

WASHINGTON — Senator McCain’s call to require a shareholder vote on pay for corporate CEOs puts him at odds with business leaders on Capitol Hill, who say the regulation is an unnecessary overreaction to concern over eye-popping severance deals for Wall Street executives.The presumptive Republican nominee targeted corporate executives in a speech yesterday to small business owners, pushing for federal prosecutors to crack down on abuses and advocating a law mandating that all aspects of CEO compensation, including severance packages, be subject to approval by shareholders.RELATED: Senator McCain’s speech at the National Small Business Summit | Obama-nomics.“Something is seriously wrong when the American people are left to bear the consequences of reckless corporate conduct while the offenders themselves are packed off with another $40 million or $50 million for the road,” Mr. McCain said in an address here to the National Federation of Independent Business.The Arizona senator came under immediate fire from Democrats, who chided him for not supporting a bill last year requiring a shareholder vote on compensation that was sponsored by their party’s presumptive nominee, Senator Obama.The Democratic National Committee also noted that hours after his speech, Mr. McCain was to attend a fund-raiser in New York City co-hosted by the chairman of Merrill Lynch, John Thain, whose reported $83 million salary in 2007 made him one of the nation’s highest paid CEOs.The House last year passed the Shareholder Vote on Executive Compensation Act, but the bill never came to a vote in the Senate, where it was sponsored by Mr. Obama and seven other Democrats. The McCain campaign pointed to the legislation’s apparent lack of broad support even among Democrats and noted that its chief advocate was running for president.Mr. McCain was seeking the Republican nomination at the time, facing one top opponent, Mitt Romney, known for his success as an executive and his business acumen.A campaign spokesman, Tucker Bounds, pointed to a McCain statement from 2003 in which he voiced concern over CEO compensation. Responding to the suggestion from Democrats that Mr. McCain’s appearance last night with Mr. Thain signaled a conflict of interest, Mr. Bounds said contributions from donors large and small “have no impact on his positions” standing up for working Americans.“It is dangerous to speculate that because a CEO makes a lot of money he makes a lot of money inappropriately,” Mr. Bounds said. “What John McCain’s record shows is that we need to ensure that CEOs that are paid handsomely are accountable to their shareholders.”The legislation is opposed both by the U.S. Chamber of Commerce and the Business Roundtable, which argued that corporate boards are increasing accountability on their own and that shareholders already have an avenue to make their voices heard on CEO pay, by filing resolutions with the board of directors.“Boards should be approving executive pay, not shareholders,” the director of public policy for the Business Roundtable, Thomas Lehner, said. Of Mr. McCain’s speech yesterday, Mr. Lehner would say only: “This type of talk in a campaign year is not unexpected.”In his 25-minute speech yesterday, Mr. McCain assailed Mr. Obama’s approach to the economy, telling small business owners that the presumptive Democratic nominee was proposing the “single largest tax increase since the Second World War.”Intensifying a battle over the economy that has opened the general election campaign, Mr. McCain touted his plans to cut corporate taxes and keep income and investment rates low. He disputed Mr. Obama’s claim that only the wealthiest Americans would pay more under the Democrat’s proposals.“Under Senator Obama’s tax plan, Americans of every background would see their taxes rise — seniors, parents, small business owners, and just about everyone who has even a modest investment in the market,” Mr. McCain said. He cited his rival’s proposal to raise taxes on capital gains and dividends, and he said Mr. Obama’s call for repealing President Bush’s tax cuts for Americans earning more than $250,000 a year would hit small businesses hard.His criticism came as Mr. Obama, for the second straight day in a two-week tour of swing states, attacked Mr. McCain’s economic platform as a continuation of failed Bush administration policies.Mr. McCain embraced Mr. Obama’s theme of change for the coming election, but he characterized the Illinois senator’s policy prescriptions as a stale recipe taken from the Democratic playbook of the 1960s and ’70s.“The question is, what kind of change?” he said. “Will we enact the single largest tax increase since the Second World War, as my opponent proposes, or will we keep taxes low, low for families and employers?”A senior economic adviser to the Obama campaign, Jason Furman, disputed Mr. McCain’s characterization of Mr. Obama’s tax plan, saying tax cuts for the middle class comprise the largest element of his platform. Mr. McCain’s tax cuts, he said, “are harmful to the economy” over the long term by increasing the national debt and reducing funds for infrastructure improvements.Mr. McCain was interrupted three times during his speech by anti-war hecklers, whose outbursts unsettled the audience but did not appear to ruffle the candidate. “That’s one of the things Americans are tired of, is people yelling at each other,” Mr. McCain said after the first interruption, drawing laughter and applause.When a second woman began shouting about 90 seconds later, he replied, again to laughter: “One of my political memories is from Ronald Reagan, who said, ‘There you go again.'”A third heckler disrupted his speech a minute later, at which point Mr. McCain quipped: “I’m running out of funny lines.”

McCain, Business Leaders Diverge on CEO Pay

McCain, Business Leaders Diverge on CEO Pay

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