Huffpost Politics

Obama Calls for Checks on Executive Pay

Posted: Updated:

INDIANAPOLIS — Democratic presidential candidate Barack Obama is demanding that company shareholders have a say in how much executives get paid as he pushes his populist message.

Obama, in remarks he planned to make to reporters Friday morning, wants Congress to pass legislation he has sponsored that would require corporations to have a nonbinding vote by shareholders on executive compensation packages.

Under Obama's legislation, shareholders could not veto a compensation package offered to an executive and would not place limits on pay. Rather, they would have a means to publicly express their position.

A similar bill passed the House last year.

The Illinois senator's comments come as he embarks on the third day of a four day-swing through Indiana, which holds its primary May 6. Obama and Sen. Hillary Rodham Clinton are running even in the state and have both been making economic pitches to voters.

"This isn't just about expressing outrage," Obama says in prepared remarks. "It's about changing a system where bad behavior is rewarded so that we can hold CEOs accountable, and make sure they're acting in a way that's good for their company, good for our economy, and good for America, not just good for themselves."

Income inequality is a hot button issue with audiences, particularly the blue collar workers that Obama is trying to peel away from Clinton in the more economically distressed regions of Indiana and Pennsylvania, which holds its primary April 22.

The high cost of chief executive pay has drawn criticism in recent years as salaries rose, stock options paid off like lottery jackpots, and perks like chauffeured cars and private jets spread.

USA Today reported this week that the median compensation for chief executives at the 50 largest companies in the United States was $15.7 million last year, even though some of the companies were not performing well.

Investor advocates, union pension funds and shareholder groups have supported the legislation. Republican critics worry it would give activist investors an inroad to change a company's policies.

Even President Bush last year questioned the extravagant pay of some company managers and directors, but said it was not a matter for government involvement.