With Dodd-Frank financial regulations in place, shareholders at most public companies (the smallest companies are excluded) now have a vote on their executive pay packages. The Wall Street Journal takes a look at how the new policy is affected American businesses.
Companies now have to take a closer look at their pay packages and be able to defend them to shareholders. Executive compensation can no longer just be outlined in the proxy statement. The PR from a rejected compensation package would not be good. Though the shareholder vote is not binding, companies are still taking this very seriously.
Companies like General Electric and Lockheed Martin only got approval for their compensation packages at the last moment. So how will these new policies affect you? Only time will tell, but the additional scrutiny will probably reduce lavish packages.