The Shareholder ForumTM


"Say on Pay" Proposals

Forum Home Page

"Say on Pay" Home Page

Program Reference


For the referenced presentation of the original version of the paper to the Forum, see


The Harvard Corporate Governance Blog, November 6, 2008 posting


Reconsidering “Say on Pay” Proposals

Posted by Keith L. Johnson, Reinhart Boerner Van Deuren s.c., on Thursday November 6, 2008 at 2:36 pm

Daniel Summerfield and I recently presented a paper to the Shareholder Forum Program on Reconsidering “Say on Pay” Proposals, held recently at the Columbia School of Journalism. We address arguments put forth by opponents of shareholder “Say on Pay”. The paper cites benefits produced by Say on Pay in Britain and analyzes points where debate in the United States has been framed in ways that obscure many Say on Pay benefits. Points include:

• 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.



© 2008 The President and Fellows of Harvard College




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.