April 20 (Bloomberg) -- The U.S. House of Representatives approved a measure to give shareholders more say on how companies pay top executives, rejecting amendments by Republicans who said investors already have the power to influence compensation.

The measure, approved 269-134, aims to rein in pay levels House Financial Services Committee Chairman Barney Frank and other top Democrats called exorbitant by giving public-company shareholders annual non-binding votes on executive salaries.

``There are unfortunately a lot of examples of excessive compensation for CEOs,'' Frank said today, speaking to reporters after the vote. ``It bites into other things that you would use the money for.''

Frank, a Massachusetts Democrat, has made tackling rising executive compensation a top priority since taking over as chairman in January. He criticized the severance package awarded to former Home Depot Inc. Chief Executive Officer Robert Nardelli in January as a ``$210 million good-bye kiss.''

There isn't a uniform, legal right for shareholders to vote on pay packages, Frank said. The legislation ``will strengthen the hands of those in the corporate world who have been trying to slow this down,'' he said.

Senate Outlook

The measure next goes to the Senate, where Senator Barack Obama, an Illinois Democrat running for president, today introduced legislation identical to Frank's bill.

Senate Banking Committee Chairman Christopher Dodd said he'll consider the impact of the U.S. Securities and Exchange Commission's recent executive pay rules and the outcomes of shareholder salary proposals voted on this year. Dodd hasn't held any hearings on the issue.

``I intend to take a close look at the House legislation, consider all pertinent views, and then determine the most appropriate course of action,'' Dodd, a Connecticut Democrat, said in a statement.

Investor advocates have pressed companies to allow shareholders to vote on pay, which they say has gotten out of hand. Median pay for chief executive officers of U.S. companies rose 9.3 percent to $2 million in 2006, according to the Corporate Library, a corporate-governance research firm-based in Portland, Maine.

Republicans said the proposal would steer talented executives to private companies, drive companies to list on overseas exchanges, and empower ``activist'' investors who have their own agendas unrelated to the best interests of the company. Shareholders already have the right to propose a vote on executive pay, they said.

Amendments Voted Down

The House rejected seven Republican amendments. One, by Representative Tom Price of Georgia, would have allowed public companies to forgo the vote if an SEC study concludes that it hinders their ability to compete for the best executives.

``I'm all in favor of a shareholder vote, if it's done without a mandate from Washington,'' Price said.

Another Republican amendment, introduced by Representative Scott Garrett of New Jersey, would have allowed shareholder votes only if executive pay at the company was 10 percent or more than the average pay at companies in the same industry.

Republicans said regulations adopted by the SEC last year should be given time to work. Those rules require more detailed disclosure on executive compensation in annual proxy statements, including a total compensation figure and more information on stock-option awards.

SEC Chairman Christopher Cox has said companies may rein in questionable pay practices if forced to reveal them in explicit detail.

`Warning Shot'

Democrats said the legislation would help keep corporate salaries in check, especially among chief executives whose performance does not merit high pay.

``It is a warning shot to corporate behavior,'' said Representative Earl Blumenauer, an Oregon Democrat. Companies and regulators should ``take seriously the rights of the people who own these companies,'' he said.

If the bill becomes law, it's not clear it will have an impact. At annual meetings so far this year, shareholders have rejected non-binding votes on executive compensation at Morgan Stanley, Citigroup Inc., United Technologies Corp., U.S. Bancorp, Wachovia Corp. and Coca-Cola Co.

The closest vote was at New York Bancorp Inc.'s annual meeting, where 47 percent of shareholders voted in favor of a say on pay.

The U.K. has allowed investors an advisory vote, which boards can ignore, since 2003. That year, shareholders of London- based GlaxoSmithKline Plc rejected a severance plan that would have granted Chief Executive Officer Jean-Pierre Garnier as much as $28 million if the company fired him. The drugmaker's board didn't increase his salary after the vote.

To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net.

Last Updated: April 20, 2007 17:36 EDT