The Shareholder ForumTM


"Say on Pay" Proposals

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Forum Summary


Reconsidering "Say on Pay" Proposals

The Shareholder ForumTM has been asked by several participants to initiate a new program for reconsidering the “advisory voting” concepts defined in its 2006 project.[1]

When Forum participants first considered advisory voting, it was viewed as a process that could be adapted individually by corporate managers and investors as a foundation for constructive communication about common interests in a company’s success.  Its subsequent transformation into a confrontational activist demand for legislatively imposed “Say on Pay” has necessarily raised important new questions:

w   If advisory voting is required for all publicly traded US companies, can investors satisfy their fiduciary responsibilities without increasing reliance on proxy advisors or other bureaucratized processes?

w   Will focus on conformance with "good governance" theories[2] distract both corporate and investor decision-makers from the essential purpose of compensation to reward competitive success?

w   Ultimately, will advisory voting help investors make better decisions about their allocations of capital?

These and other concerns are reflected in increasing marketplace uncertainty about advisory voting.  Recent news reports of declining support for “Say on Pay” proxy proposals[3] have been countered by RiskMetrics-ISS reports presenting statistics to show that their activist client network seemed to be making progress.[4]  Academic research also reports significant divisions among investors, including between “governance” and investment representatives within fund managers, and further suggests that many of the governance professionals who advocate “compulsory” advisory voting view it as a means of increasing their influence.[5]

To address these issues, Sibson Consulting has supported the organization of this open Forum program to examine how “Say on Pay” might serve the public interest in essential marketplace processes of enterprise competition and capital allocation.  Corporate, investor and professional representatives with recognized expertise in successful performance will be invited to support the program in an advisory panel that guides the Forum’s conduct of workshops, academic studies, surveys, open meetings or other processes as required for a full public review of the issues and a concluding report.

This Forum program is open, free of charge, to all marketplace decision-makers and the professionals who advise them, according to the Forum's standard Conditions of Participation


July 7, 2008

Forum chairman:

Gary Lutin

Lutin & Company, 575 Madison Avenue, New York, New York 10022

Telephone: 212-605-0335



Program Panel (2009):

Douglas K. Chia, Johnson & Johnson

Hye-Won Choi, TIAA-CREF

Cornish F. Hitchcock, Hitchcock Law Firm and Amalgamated Bank

Bess Joffe, Hermes EOS       

Cary I. Klafter, Intel Corporation

Richard V. Smith, Sibson Consulting

Louis M. Thompson, Jr., Kalorama Partners



[1] For background information about the project initiated in December 2006 as part of the Options Policies Forum program, see the Forum’s project reference page for “Advisory Voting.”




This Forum program is open, free of charge, to anyone concerned with investor interests relating to shareholder advisory voting on executive compensation, referred to by activists as "Say on Pay." As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The organization of this Forum program was supported by Sibson Consulting to address issues relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of performance leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.