A PDF of my paper,Is 'Say on Pay' Justified?, as published in Regulation, Vol. 32, No. 1, pp. 42-47, Spring 2009, is now available for downloading from SSRN.
Abstract:
There is growing political support for adopting a 'Say on Pay' requirement for executive compensation - that is, shareholders must sign off on executive compensation. This paper examines three premises fundamental to the 'Say on Pay; movement: that current executive compensation is unjustifiably high, that federal legislation is required to address that high compensation, and that federal legislation would be effective in this aim. The paper finds that all three claims are problematic.
Keywords: federalism, say on pay, h.r. 1257, executive compensation, corporate governance, principal-agent dilemma, director primacy, shareholder activism
