When shareholders have a say on pay

IN RECENT years, against the backdrop of a sluggish global economy and depressed stock prices, the call from shareholders to regulate executive pay is becoming too loud to ignore.

Regulatory developments in Europe, Australia and North America giving shareholders greater oversight of executive pay and curbing bonuses in the financial services sector reflect a hardening of attitudes among politicians, investors and the general public.

This "Say on Pay" movement is now gaining ground in most of the advanced economies for shareholders to express their views regarding companies' executive remuneration practices.

How Say on Pay works is typically by a…