Members of the U.S. House of Representatives approved a bill that would give shareholders an annual advisory vote on executive pay.

Lawmakers passed H.R. 1257, the "Shareholder Vote on Executive Compensation Act," by a vote of 269-134 on April 20. With Democrats holding a 31-seat majority in the House, the vote indicates that the bill attracted some Republican support.

The bill is sponsored by the chair of the House Committee on Financial Services, Democratic Rep. Barney Frank of Massachusetts. The legislation includes a provision for a separate shareholder vote if a board approves a new severance package for executives while negotiating to sell the company.

"This is a bill to further the workings of the capitalist system of the United States," Frank said in a committee press release after the vote. "It has one very specific provision; it says that the shareholders, the owners of public corporations, will be allowed to vote every year in an advisory capacity on the compensation paid to their employees who run the companies."

Though the bill passed by a fairly wide margin in the House, the legislation's prospects of becoming law are uncertain. No similar bill has been introduced in the Senate, where Democrats hold a 51-49 majority.

While the White House released a short statement on April 17 expressing opposition to the bill, President George W. Bush has stopped short of saying he will veto the measure if it reaches his desk. The Bush administration said it "does not believe that Congress should mandate the process by which executive compensation is approved." The White House said recent governance improvements, such as the Securities and Exchange Commission’s new pay disclosure rules, "should be given time to take effect" before additional requirements are imposed.

In response, Frank and other bill supporters emphasize that bill "will not set any limits on pay." According to Frank's committee staff, the legislation will ensure that shareholders have an advisory vote on executive pay practices "without micromanaging the company."

Meanwhile, investors continue to show interest in annual advisory votes on executive pay. On April 17, shareholder proposals at Citigroup and Wachovia won about 43 percent and 40 percent support, respectively, according to the proponent, the American Federation of State, County, and Municipal Employees. The following day, a proposal filed by the Benedictine Sisters received 30.4 percent at Coca-Cola Co., the company reported. So far this season, pay vote resolutions have averaged about 39.7 percent support at six meetings.

Investors at nine companies will vote on the issue next week. Those meetings include Wells Fargo and Merck on April 24; Wyeth, Lockheed Martin, Capital One, and Valero Energy on April 26; and Abbott Laboratories, AT&T, and Merrill Lynch on April 27.