Structuring Say-on-Pay: A Comparative Look at Global Variations in Shareholder Voting on Executive Compensation

Abstract

In the fourth of five notes of the Columbia Business Law Review Survey, the author discusses how a renewed focus on executive compensation growing out of the global economic calamity has led to calls for shareholder votes on executive pay. This note argues that while such votes do not address the underlying causes of the financial crisis, they are nevertheless a necessary reform because, if properly structured, they can align executive compensation with shareholder interests. After reviewing say-on-pay regulations in other countries, this note suggests that making shareholder votes not merely advisory but binding on boards may be appropriate in this country because of the difficulties U.S. shareholders face in replacing directors.