The Regulation of Executive Compensation

The Regulation of Executive Compensation

Greed, Accountability and Say on Pay

Kym Maree Sheehan

Using the model of the regulated remuneration cycle, and drawing upon evidence of its operation from interviews, voting data and remuneration reports from UK and Australian companies, the book demonstrates whether say on pay can operate successfully to both constrain executive greed and ensure accountability exists for company performance and decision-making.

Chapter 2: The regulated remuneration cycle

Kym Maree Sheehan

Subjects: law - academic, labour, employment law


There are many presentations of the legal framework for executive remuneration, such as that devised by the Productivity Commission during its 2009 inquiry into executive remuneration in Australia. These presentations may fail to eff ectively link the disparate elements of legislation, regulations, accounting standards and best practice statements that we have already seen have been an integral part of the regulation of executive remuneration. A more holistic model is required if we are to fully appreciate how say on pay as a regulatory technique fits in with other techniques. Drawing on the concepts of regulatory space, the enforcement pyramid, and Julia Black’s writings on rule dimension and regulatory conversations, this chapter presents the regulated remuneration cycle as a device that is valuable in analysing the regulation of executive remuneration via say on pay.

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