Public scrutiny — and criticism — of executive compensation has never been sharper than it is today. Requirements that companies conduct periodic shareholder votes on executive pay have now become an integral part of the governance process in the U.S., Canada and key European countries, including the U.K.
While most companies have achieved high levels of shareholder support during these initial years of say on pay, the risk of negative votes is something companies take quite seriously, as conditions can quickly change. An unfavorable say-on-pay vote can damage reputations, embarrass board members and, in the U.S., invite a lawsuit.
What steps are companies taking to gain shareholder support in say-on-pay votes? Our research shows organizations are engaging key stakeholders in ongoing dialogue about executive pay, enhancing their pay disclosures and more. The ultimate question is: Are you getting the link between executive pay and company performance right?