• Recognition that success of Say on Pay in other markets cannot be evaluated over a short time frame and must acknowledge the ongoing cross-border effect of executive compensation practices in the United States;
• While Say on Pay gives shareholders more influence, its most important effect is empowerment of directors;
• Say on Pay fosters improved communication between shareholders and boards, creating opportunities for both to increase their understanding of market sentiment and enhance their respective roles in corporate governance;
• Advisory votes on compensation practices would allow shareholders to send a message to boards without throwing qualified directors off the board at companies where a majority vote standard has been adopted for director elections;
• Say on Pay encourages boards to focus greater attention on succession planning, which has been a dangerously low priority for many boards;
• Both excessive executive compensation and pay without performance present risks to shareholders that Say on Pay could legitimately address.
The paper is available here.