International - Say on Pay

2015.Feb.24  Italian Say on Pay - discussed in Harvard Law Governance Blog

2013.May.13  "Does Say on Pay Matter? Evidence from the German natural Experiment" (Oxford Univ.), seeming to find that say on pay does curb executive compensation, with the report including a comprehensive country-by-country appendix, and with supporting data for the following conclusion:

  • Our findings suggest that if anything supervisory boards anticipate shareholder-behavior, because in 2010, i.e. the year that shareholders could express their evaluation of compensation schemes for the first time and at all firms in the sample, remuneration was noticeably reduced—it went down even after we control for performance measures—which also contributed to the high acceptance rates in most of the 2010 votes.

2014.Jan "Say on Pay Around the World" -- draft paper (by Randall Thomas and Christopher van der Elst) discusses "compelling reasons" for the expanded adoption of say on pay laws.

2013.Jan.10  Say "Before" Pay?  Israel's New Law Brings Innovation.  This Harvard Governance Blog describes a new "Say Before Pay" law that took effect in Israel just about a month ago. The authors advised the Justice Department's committee that formulated Israel's executive compensation reform. Although not going so far as to require binding say on pay (see the next blog), Israel has injected a twist in that the shareholder advisory vote on executive compensation - and CEO employment agreements - must occur before they become final. As described in the blog, Israel's law reflects US and UK rules relating to compensation committee independence, as well as policies favoring clawbacks and long-term performance-based compensation that takes risk into consideration. These practices are consistently being endorsed as executive compensation controls continue to go global . . .  with all trending toward more and more shareholder empowerment. 

2011.Sept.22  Global Perspective -- Mercer Alert, providing the following background context: "the concept of shareholders casting votes on executive compensation already had a precedent in the United Kingdom (2003), and the intervening years witnessed analogous rules in the Netherlands (2004), Australia (2005), Sweden (2006), Norway and Denmark (2007) and Germany (2009), among others." 

  • "In countries such as Australia, Norway, Sweden and the UK, the vote is mandated by law on an annual basis."
  • "Although the historical context that gave rise to say on pay has varied by country, the outcome of say on pay has followed a common path: generally greater company awareness of hot-button compensation issues and more engagement and transparent communication with shareholders."

See Binding Say on Pay