Ten Myths of “Say on Pay” — The Harvard Law School Forum on Corporate Governance

Small business of-interest and need-to-know.   This study actually represents a study of the various studies on say on pay.  However, the insights provided with this examination are of value.

Excerpt:  In the paper, Ten Myths of “Say on Pay”, my co-authors (Allan McCall, Gaizka Ormazabal, and Brian Tayan) and I review many widely held misconceptions regarding the shareholder voting practice called “say on pay.” “Say on pay” is a prominent issue today, given its unique position at the intersection of executive compensation and shareholder democracy—two topics which themselves are of deep interest to investors, stakeholder, regulators, and the media. Despite this interest, several misconceptions have developed which continue to be commonly accepted. Fortunately, academics have devoted considerable effort studying “say on pay,” shareholder democracy, and executive compensation. As a result, a lengthy empirical record exists against which “say on pay” can be examined. Our intention is to review “say on pay” in light of the scientific evidence so that practitioners have a better understanding of the limits and consequences of granting shareholders the right to vote on executive compensation.

The ten myths of “say on pay” that we examine can be grouped into three general categories.

Read full article via Ten Myths of “Say on Pay” — The Harvard Law School Forum on Corporate Governance and Financial Regulation.

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