US SEC moves to curtail shareholder voting power in corporate governance shift

The Securities and Exchange Commission has unveiled a proposal to eliminate mandatory shareholder votes on executive pay packages, a move that reverses years of investor-led efforts to strengthen governance oversight. Under current regulations, public companies must submit their compensation plans to shareholder ballots, giving investors a voice in how much executives earn. The SEC's proposal would eliminate this requirement, citing reduced regulatory burden on corporations as justification. The shift has drawn criticism from shareholder advocates and institutional investors who view the votes as crucial checks on executive excess and misalignment with company performance. Supporters of the current rules argue that shareholder approval of compensation has driven greater accountability and transparency in boardrooms across the United States. The proposal comes as the SEC, under new leadership, has signalled a broader shift toward reducing regulatory requirements for corporations. Investor groups and reform advocates have vowed to oppose the measure during the public comment period, though the ultimate outcome will depend on whether the commission moves forward with finalising the rule change. The decision could have ripple effects on corporate governance standards globally, as many international companies benchmark their practices against US regulatory requirements.