Dodd Stays; Where Does Say-On-Pay Go?

Little has been said recently about say-on-pay. Not long ago, it was hard to avoid hearing about it. At least four separate bills were introduced, including one proposal from the White House itself. The bill sponsored by Rep. Frank was even passed by the House. No doubt much of the blame can be laid on the health care debate, which is clearly taking up much of the oxygen in the room. Nonetheless, it is still somewhat mystifying that a piece of legislation should grind to a halt when it has already passed the House, been advocated by the President and seen significant Senate support (it was a key element of the TARP legislation applicable to bailed out financial institutions). As it turns out, there is another possible explanation for the slow down.

Within the Senate, say-on-pay bills are within the jurisdiction of the Banking Committee, which has long been chaired by Senator Dodd who is a stronger supporter of say-on-pay and included it in the TARP legislation. It goes without saying that the chair of the Banking Committee can influence whether say-on-pay ever becomes law. Recent months have not, however, been quiet for Senator Dodd. Dodd is also a long-serving member of the Senate’s Health, Labor, Education and Pension Committee, which has jurisdiction over health care policy and was chaired by Senator Kennedy until his death. Dodd is reported to have been functioning, during the weeks that preceded Senator Kennedy's death, as the de facto chair of the HELP Committee. Given the attention health care has commanded recently, it is hard to imagine that Dodd or his staff have had much time to spend on executive pay reform.

Just as importantly, Dodd's seniority in the HELP Committee has left the leadership and direction of the Banking Committee up in the air. Under Senate rules, Dodd was entitled to take over chairmanship of the HELP Committee, and he has reportedly given much time and thought to doing so. This is relevant to say-on-pay because Senate rules prohibit any Senator from chairing more than one committee. Thus, a move by Dodd to chair the HELP Committee would have handed the leadership of the Banking Committee, and control of the say-on-pay issue, to Senator Tim Johnson of South Dakota, who is generally considered much more moderate than Senator Dodd. In addition, the mere uncertainty over who would eventually run the Banking Committee has made it difficult for Committee staff and others to push forward on significant legislation.

Yesterday, Senator Dodd settled the speculation. He has decided to remain at the helm of the Banking Committee. There is, of course, no way to know how much of the slowdown on say-on-pay is attributable to overshadowing by health care, on the one hand, or the lack of leadership or direction inside the Banking Committee, on the other hand. But now that Senator Dodd has made his announcement, we may find out.