Attack on corporations fails in Assembly

Aug. 22, 2012

By Katy Grimes

It’s rare that a bad bill fails to pass one or the other houses in the California Legislature. However, Tuesday a bill failed which would have required private sector, publicly traded corporations to file annual income and benefits statements with the California Secretary of State for the top five highly compensated employees.

It was another witch hunt on the private sector. However, this attempt surprisingly failed because so many Democrats would not vote on SB 1208, by Sen. Mark Leno, D-San Francisco.

Unfortunately, that doesn’t mean the bill won’t live to see another day. I fully expect to see this bill language stuck into a trailer bill, late in the night on the last day of session.

This bill isn’t about requiring more transparency, as Assemblyman Charles Calderon stated during floor debate Tuesday. Calderon, a Democrat from Montebello, made it very clear that this is a get-even-with-the-wealthy bill. “Stockholders have a right to know whether there are lucrative pension plans that are underfunded,” Calderone said. “The reality is, the SEC gave us Bernie Madoff, and under the SEC this economy was brought to its knees.”

Corporate envy

“In recent years, CEO pay at corporations across America has grown exponentially, while wages for workers have remained relatively stagnant,” the bill’s analysis states. Much of this increased pay comes in the form of incentive compensation, which rewards an executive for performance while on the job.”

According to Democrats, this is an outrageous free market concept.

The opposition to the bill states, “Adding new nonconformity to federal reporting requirements exacerbates California’s job-killing reputation for excessively burdensome regulation of business. Furthermore, because the information required to be reported under SB 1208 is not currently public information, the bill erodes important confidentiality that taxpayers and their employees expect.”

Sunshine and transparency

Assemblyman Tom Ammiano, D-San Francisco, defended the bill, and said that the state was right to put some sunshine on  these entities, particularly if they have nothing to hide.

“If this is about sunshine, how about union representation and what they are doing?” Assemblyman Curt Hagman, R-Chino Hills, asked. “This just puts another nail in the coffin of California businesses.”

“Bain, Bain, Bain,” Ammiano kept loudly saying while Hagman spoke, referring to the venture capital firm Republican Presidential Candidate Mitt Romney once ran.

“It’s amazing that such an effort is being made to force private corporations to disclose more,” Assemblywoman Diane Harkey, R-Dana Point, said. Harkey added that California should worry about its own balance sheet before and credit rating, before deflecting attention away onto the private sector. And she pointed out that publicly traded companies are already required to disclose a great deal of information to the U.S. Securities and Exchange Commission.

“Speaking of nothing to hide, it wasn’t that long ago that this body gave CARB the authority to allow WCI, Inc. to register as a corporation in Delaware and operate in security,” said Assemblywoman Shannon Grove, R-Bakersfield.

Bill fails

“I almost got this through,” Calderon said. But in the end, the bill failed with a 32-36 vote, with 12 Democrats not voting at all.