The Shareholder ForumTM


"Say on Pay" Proposals

Forum Home Page

"Say on Pay" Home Page

Program Reference


Peter C. Clapman, whose comments are presented below, is CEO of the US affiliate of UK-based Governance for Owners LLP, and currently chairs the Committee on Institutional Investor Governance of the Stanford Law School Institutional Investor Forum.

For links to the referenced draft of Professor Gordon's paper and other comments, see

Mr. Clapman had also offered comments on Professor Gordon's initial July 2008 draft addressing "Say on Pay" issues.



Comments of

Peter C. Clapman

January 22, 2009


I commend Jeff Gordon for trying to reconcile many comments from a variety of sources, but in the final analysis believe he had it right the first time through. I do not see the basis for distinguishing between the size of companies or the markets they are traded upon. The British model is not appropriate because the AIM market does not require companies traded upon it to adopt the broad British principles of corporate governance, SOP being only a small part of the total regime. Trying to distinguish between NASDAQ and the NYSE would make no sense. Equally, using some broad index makes no sense as well.

I also raise, perhaps heretically, whether advocates of legislative universal SOP appreciate that they may be harming their presumed cause. Under current regulatory practice, companies with poor practices (or so alleged) can be individually targeted by shareholder resolutions which is a shadow SOP question. As noted before, company directors are now substantially subject to majority vote requirements for their own continuance on the board, again a real SOP result in substance.

A relatively small number of companies can be managed by a sufficient number of shareholders in terms of focus. If a universal rule were in place, all companies would include a pay practice report, which in short order would become a very routine item, and as such largely ignored by most shareholders except as they would follow a proxy advisory recommendation. The basic flaw in all this is how few shareholders are really capable of, or prepared to provide the resources for any case-by-case analysis of individual companies. The companies which currently might be subject of a shareholder resolution would then be merged into the mass of all companies. This outcome does not serve the system well.



Peter Clapman

Governance for Owners, Inc.





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.