Van der Elst, Christoph --- "Answering the say for no pay" [2017] ELECD 1415; in Watson, Susan; Vasudev, M. P. (eds), "Innovations in Corporate Governance" (Edward Elgar Publishing, 2017) 151

Book Title: Innovations in Corporate Governance

Editor(s): Watson, Susan; Vasudev, M. P.

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781786432841

Section: Chapter 7

Section Title: Answering the say for no pay

Author(s): Van der Elst, Christoph

Number of pages: 40

Abstract/Description:

This chapter examines the effects of ‘say on pay’, more particularly, how companies in Europe respond to dissenting votes on executive remuneration. It aims to contribute to the scholarly literature on the subject, focusing particularly on the developments and trends in the UK and Belgium. The chapter presents studies of the effects of the voting down of remuneration reports, and suggests improvements to the existing system. The recommendations include new regulation in Belgium to provide more detailed guidelines for companies in dealing with negative votes and a two-strike system for say on pay. In the two-strike system, if a company fails the advisory shareholder vote on remuneration, the next vote should be binding. To seek the second vote, the company must amend remuneration practices so they address shareholder concerns.