Say on Pay: A Bust?

The Wall Street Journal todays has a nice piece by Tom McGinty on shareholders resolutions that ratify executive pay.  Investors in struggling banks do not seem to want to vote for the resolutions.  I am not surprised. I suspect that what shareholders want is different than what the resolutions offer.  Shareholders do not mind paying executives when they perform well; they do want to penalize executives once the market has discovered that the firm has been very poorly managed.  I suspect a right to trigger "claw-back" provisions are closer to what shareholders really want -- the right to exact vengeance for economic pain.  A resolution that would fit closer to what investors would support would set up a shareholder vote, triggered by a 20 percent stock price drop compared to under a relevant index for the year, that would allow shareholders to reclaim otherwise paid salary and benefits for the year.