For more than a decade, determining the appropriate level of compensation for corporate executives has been a controversial issue within the courtroom, the boardroom and among shareholders. During a period of increased activism by shareholders, more authority, commonly referred to as “say on pay,” is being demanded over executive compensation packages. Say on pay importance will most likely increase in popularity in the wake of the subprime mortgage and financial institutions crisis affecting the U.S. financial markets and the federal economic stimulus plan. Within the debate over the federal economic stimulus plan, one of the issues included the outcry for compensation limits on executive pay as well as restrictions on golden parachutes for failing corporations. This article will briefly outline the components and history of say on pay, describe support and opposition to its implementation and finally discuss the future of say on pay proposals.
WHAT IS SAY ON PAY?
