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Just Compensation Focusing on Issues and Trends in Corporate Governance and Executive Compensation

Binding say-on-pay in the UK?

Posted in Foreign Pay Issues, Say-on-Pay/Say-on-Frequency

As this post from David Sneyd at ISS’s “Insight” blog notes, UK authorities are apparently considering a proposal to make the UK’s version of say-on-pay binding.  As David notes, the practicalities of the proposal remain unclear:

First, there is the question of what happens if a binding vote is lost, given the legal complications in reversing contractual arrangements with individual directors. Second, there is the fact that less than two dozen remuneration report votes have been lost at FTSE AllShare companies since say-on-pay was first introduced, implying that shareholders rarely defeat these resolutions even on a non-binding basis.

This report in the Financial Times suggests that enthusiasm for the proposal has been muted so far.