The Regulation of Executive Compensation
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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.
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Chapter 10: The advantages and limits of say on pay as a regulatory technique

Kym Maree Sheehan


When say on pay was fi rst introduced in the UK, at least one interviewee thought ‘That’s a stupid idea. What’s the point of that?’ A similar view was expressed in submissions to the Joint Committee on Corporations and Financial Services in 2004 that considered the bill to introduce say on pay into Australian law: If the objective of the proposed changes is to provide shareholders with an opportunity to express their views on remuneration, then a provision requiring the chair to invite debate on this topic is far more appropriate than a ‘chocolate teapot’ provision, such as s 250R(2), which simply permits the board to pay lip- service to the members while incurring substantial and unnecessary costs for the company. The UK corporate governance manager first quoted above soon came to see the value of the advisory vote:

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