by Mathew Katz

The House Financial Services Committee just approved legislation that would allow regulators to ban incentive pay at banks, and allow shareholders to vote on bonuses. The legislation comes after similar measures have been introduced in the U.K. and the European Union. The goal of all of this anti-bonus legislation is to discourage the sort of bonuses that led bankers to take the excessive risks that led to the financial crisis itself. The bill was approved by a 40-28 vote, with most Republicans on the panel voting against it.

Naturally, the legislation wasn't taken too well by the U.S. Chamber of Commerce, the nation's largest business lobby. Its executive director, Tom Quaadman, had this to say:

This legislation would create a command and control regulatory scheme. Employee compensation should be a decision made by appropriate levels of management or the board of directors and based on a variety of factors, including merit and promotion. It moves the government into the role of setting compensation policies for virtually every employee of all financial firms.