House passes executive-pay restrictions

The House passed legislation on Friday designed to clamp down on excessive corporate pay and give government regulators power to ban pay packages at financial firms that encourage "inappropriate risk."

The measure passed on a vote of 237-185 and represents the first step by lawmakers to move legislation overhauling the financial system.

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The bill seeks to empower shareholders by giving them a greater "say on pay" at corporate firms and to bolster the independence of compensation committees. One of the thorniest provisions in the bill gives federal financial regulators the power to prohibit "inappropriate or imprudently risky" compensation packages at firms that have more than $1 billion in assets.

The vote was largely along party lines. The Senate will likely take up the measure in the fall when senators begin debate on efforts to overhaul the financial system.

The House Financial Services Committee is planning debate on a range of other financial measures after the August recess.