Congress's push to overhaul financial services regulation has picked up speed with passage by a key committee of a bill that would reform financial institutions' executive pay practices.

The House Financial Services Committee voted 40-28 on Tuesday to approve H.R. 3269, the Corporate and Financial Institution Compensation Fairness Act, which would, among other things, give shareholders a non-binding "say on pay" vote for top executives. It would also require the compensation committees of public companies to be made up of independent directors.

The measure, which aims to rein in compensation practices viewed by proponents as causing excessive risk taking, is part of the larger regulatory reform package being crafted by the Committee to address the causes of the financial crisis.

The legislation would also require federal regulators to proscribe "inappropriate or imprudently risky compensation practices" as part of solvency regulation of all financial institutions and would require financial firms to disclose any compensation structures that include incentive-based elements. Financial institutions with assets of less than $1 billion would be exempt from the incentive-based compensation disclosure requirements and compensation structure oversight.

The committee also adopted several amendments to the bill, including a provision that would allow the SEC to exempt certain categories of issuers from the say-on-pay requirements and one that requires at least annual reporting of annual say-on-pay and golden parachutes votes by all institutional investors, unless such votes are otherwise required to be reported publicly by SEC rule. Another provision would require the GAO to study and report to Congress within one year of enactment the correlation between compensation structure and excessive risk taking.

House consideration of the measure is expected on Friday.

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