Why is the GOP blocking shareholder rights?

Imagine you are a shareholder in a company that, year in and year out, gives its chief executive 10-figure pay packages. You're unhappy about this, and you'd like to make your feelings known. So you want a chance to tell the company. (You know, the one in which, thanks to being a shareholder, you are part owner.) Should you have that right? Now, mind you, this isn't the right to actually overrule the board's decision on how much the chief gets paid. It's just to have a vote in which you get to tell the board—in a nonbinding way—that you're fed up.

Who could possibly oppose this? House Republicans, that's who. On Tuesday, the House financial services committee approved a bill, the Corporate and Financial Institution Compensation Fairness Act of 2009, that would mandate companies to allow such a vote, which has become known colloquially as "say on pay." "Say on pay" got out of committee after a strict party line vote, with all 28 Republicans voting against it.

If the Republicans are looking for a way to alienate their own core constituency, they've found it. Critics of the Republican Party like to deride it as the party of the rich, but on this issue, at least, the accusation would be unfair. We have a pretty good idea of where the rich stand on "say on pay": They love it, just like everyone else. Accountability for out-of-control CEO salaries might play upon the envy of the poor (or, rather, everyone whose annual salary hasn't yet reached the seven-figure mark), but it plays more directly to the interests of the well-off who hold stocks and mutual funds.

The executive compensation backlash, and specifically the simple, tiny idea of just letting shareholders tell executives and the board when they think the CEO is getting paid too well, has gained so much momentum that it's virtually impossible to find anyone of significance who will go on the record as being against it. Even some leading CEOs have signed on, with Verizon (VZ) and Apple (AAPL) (not exactly a poster child for shareholder rights) deciding to give shareholders the modest opportunity to voice their approval or disapproval of the CEOs' pay package. The obvious exceptions are lobbying groups like the Chamber of Commerce and the Business Roundtable—the purpose of both organizations basically is, after all, to say the things its members would be ashamed to say themselves. On this issue, the CEOs of America speak with muffled voices indeed. How muffled?

Well, earlier this month, USA Today ran a story with the brave headline "CEOs Openly Oppose Push for Say on Pay by Shareholders." Which CEOs did the paper catch openly opposing "say on pay"? The money quote—"Say-on-pay is just another government regulation and intrusion into free enterprise"—comes from a guy named Howard Putnam who was CEO of Southwest Airlines (LUV). From 1978 to 1981. And then CEO of Braniff (if you're too young to remember, kids, that was an airline on which the flight attendants wore Pucci miniskirts) when it went bankrupt in 1982. And then there was also a bizarre quote from the guy who runs Carl's Jr., arguing that shareholders might use the "say on pay" vote to try to influence company policy. (A scandal! Shareholders telling folks how to run their company!)

If the best person you can find to swing the anti-"say on pay" battle-ax is a man who ran an airline that went bankrupt 25 years ago, this does not count as CEOs "openly" opposing anything.