In a narrow 3-2 vote today, the U.S. Securities and Exchange Commission (SEC) has green lighted a provision that will give shareholders a say on the executive pay at companies they have a substantial stake in.

In her prepared comments, SEC Chairman Mary Schapiro said that a say-on-pay vote is “required at least once every three years,” beginning with 2011’s annual shareholder meetings moving forward.

The earlier decision, which will amend Rule 14a-8, will now allow shareholders of big public companies to “facilitate the choice of frequency of every one, two, or three years,” Shapiro stated, while noting that smaller reporting companies will be granted a two year temporary exemption.

“The delayed ccompliance date for smaller reporting companies is designed to allow those companies to observe how the rules operate for other companies, and should allow them to better prepare for implementation of the rules,” the Commission’s Chairman said.

Accordingly, Commissioners Kathleen Casey and Troy Paredes opposed the new regulations because of their anticipated impacts on the smaller corporate world.

“I believe the say-on-pay rules we are adopting today are unduly restrictive and impose unnecessary burdens, particularly on smaller reporting companies, with minimal corresponding benefits for investors,” Casey said in her prepared speech for today’s meeting.

Paredes on the other hand exclaimed that the Commission did not do enough for smaller companies, and “should have afforded smaller public companies an outright exemption” from the new regulations.

Also included in the provision are shareholder advisory votes pertaining to executive pay related initiatives that are “based on or otherwise relates to the acquisition, merger, consolidation, sale or other disposition of all or substantially all of the assets of an issuer, and requires enhanced disclosure of these golden parachute arrangements,” the agency said on the Jan. 25 meeting agenda.

Previously, in October, the SEC Chairman revealed in her testimony to the U.S. Senate Committee on Banking, Housing, and Urban Affairs that the SEC expected “to adopt the final rules in time to inform the 2011 proxy season.”

 “We anticipate that the [SEC] will propose rules designed to implement these provisions in the next few weeks,” the Chairman explained previously in her Oct. 1 comments regarding the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection by the Commission.

“The Act also requires every institutional investment manager to…report at least annually how it voted on any of the required votes,” she said previously.