(Bloomberg News) The U.S. Securities and Exchange Commission gave shareholders the right to weigh in on pay packages for top executives to increase scrutiny of compensation practices blamed for fueling Wall Street risk-taking.

SEC commissioners voted 3-2 yesterday to enact the say-on-pay measure that will subject compensation plans to non-binding shareholder votes as often as once a year. The proposal is part of the agency's rulemaking under the Dodd-Frank Act.

Dodd-Frank, the regulatory overhaul enacted in response to the 2008 credit crisis, directed the SEC to let investors vote their views on executive pay amid public furor over incentives that rewarded the kind of risky trading that toppled Lehman Brothers Holdings Inc. and Bear Stearns Cos.

The SEC amended the rule proposed in October to "specify that a say-on-pay vote is required at least once every three years, beginning with the first annual shareholders' meeting taking place on or after Jan. 21," Chairman Mary Schapiro said in comments prepared for the meeting. The rule will also require companies to disclose whether the votes are binding and how they have considered the results of previous votes, she said.

The rule will also require enhanced disclosure on so-called golden parachute payments for executives whose companies are acquired, subjecting them to shareholder advisory votes along with the takeover agreements.

Republican Opposition

Republican Commissioners Kathleen Casey and Troy Paredes voted against the rule, saying smaller companies should've been given a permanent exemption instead of the temporary exclusion that would force them to hold votes at annual meetings held after Jan. 21, 2013.

"I do not believe it is appropriate to subject them to the say-on-pay requirements at all," Casey said before the vote. She and Paredes also said newly public companies should have been given a grace period before having to conduct votes.

The rule seems to pressure companies to conduct votes every year, which "doesn't work for everybody," especially smaller companies, said Sanjay M. Shirodkar, a former SEC lawyer with DLA Piper LLP in Baltimore.

Commissioners voted 5-0 to seek comment on a measure that would change the definition of an "accredited investor" permitted to hold stakes in riskier instruments and as well as a proposal that would require investment advisors to report information as part of a broader effort to assess systemic risk.

The accredited-investor proposal would disallow use of a primary residence in calculating the $1 million minimum for net worth. Dodd-Frank called for the SEC to review the standard at a minimum of every four years after that and gave the agency authority to make future adjustments.