July 10, 2011
Say on Pay-My View
In my post on Friday on say-on-pay, I asked, "Is the 98.5% approval rate a strong argument against requiring companies to go through this exercise? Or should we focus on the small number of companies where shareholders voted against management?" Steve Bainbridge responds with a resounding vote against say-on-pay.
Just for the record, I am also opposed to say-on-pay. I'm just not sure the voting results are going to sway many people one way or the other. Those who support say-on-pay are going to say that the positive results at a few companies justify the cost imposed on all companies. Those opposed are going to say the overall cost isn't worth the few positive results, especially since those positive votes are non-binding. In any event, many proponents of say-on-pay seem to be motivated more by generalized notions of democracy drawn from the political sphere than by any weighing of the economic costs and benefits.