Is ‘Say-on-Pay’ the Most Reasoned Approach to Executive Remuneration Accountability?: An Assessment of the Meaningfulness of UK and US ‘Say-on-Pay’ Frameworks

Abstract

This essay aims to contribute to the ongoing debate on the meaningfulness of ‘say-on-pay’ on the remuneration report as a corporate governance mechanism that aims to limit excessive executive remuneration and the harmfulness manifested by it in the UK and US. This will be achieved by contending that while this development in corporate governance has the potential to reduce the level of overly-exaggerated compensation packages, a greater emphasis needs to be placed on striking a balance between income fairness and aligning the interests of managers with shareholders to reduce overall agency costs.  This argument will be made on the grounds that the current say-on-pay frameworks in the UK and the US are not only ineffectively designed, but also ineffectively utilised, given the observed low levels of voting dissent on remuneration policy.