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May 27

Say on pay proves to be a dud

Posted by Stephen Taub in say-on-paySay on PaycomplianceCEO compensation

Stephen Taub

So much for Say on Pay being a game changer.

As I have been asserting for over a year, the advisory vote over whether to approve a company's executive compensation table has become something of a dud.

With shareholders of more than 62 percent of companies having had their chance to express their sentiments on the issue, just a majority of shareholders voting at 26 companies voted "no" so far this proxy season, according to

This means shareholders at 1556 companies-or more than 98.3 percent of those that have already held the vote-approved the compensation of their top execs.

In addition, more than 91 percent of shareholders who voted supported the pay table.

Remember, under the Dodd-Frank Act, public companies with meetings on or after January 21, 2011 are required to provide a separate non-binding say on pay vote to approve the compensation of executive officers as disclosed in the company's proxy statement at least once every three years. Keep in mind that
smaller reporting companies -those with a public float of less than $75 million--are exempt from holding this vote for another two years.

Another 957 companies are scheduled to vote on the matter, according to

Of course, the 26 companies that received a majority of "no" votes are not required to do anything. This is a non-binding vote.

In addition, Dodd-Frank requires companies to provide a separate non-binding vote for shareholders to choose the frequency on which to hold the "say on pay" vote--annual, biennial, or triennial basis. Proxy advisory firms like ISS tried to pretend this was a big issue, even though it really isn't. It was aggressively urging for an annual vote.

Alas, ISS can declare victory. Shareholders at 81 percent of companies called for an annual Say on Pay vote going forward. About 18 percent preferred triennial.

Whatever. Given that shareholders at virtually every company supported the top executives' compensation in the first advisory vote when everyone was watching, the future annual exercise will become even much more ado about absolutely nothing.



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