Corporate Governance

New York Law Journal Examines Say-on-Pay in the U.K. and its Implications for the U.S.

By Jim Hodgson

We continue to follow the implementation of ?say-on-pay? rules mandated by the Dodd-Frank Act, pursuant to which shareholders will soon be given the right to a nonbinding vote on executive compensation.  The New York Law Journal published an interesting article this morning, which examines the impact that say-on-pay rules have had in the U.K.  Such voting rights have been in effect there for close to a decade.

The NYLJ article, available here, concludes that:  ?If history is a guide, . . . pay practices will evolve, but that we should not expect the widespread implementation of say-on-pay voting in the United States to result in rampant shareholder revolts.  However, companies should view this history with caution as proxy advisory firms ? with their outsized influence on shareholder voting perhaps increasing due to technical voting changes imposed by the Dodd-Frank Act ? have made clear that they intend to fully jump into the fray.?

Full post as published by PomTalk on January 13, 2011 (boomark / email).