What Was the Question? The NYSE and Nasdaq's Curious Listing Standards Requiring Shareholder Approval of Equity-Compensation Plans

Abstract:     
Executive pay packages are increasingly subject to the criticism that they do not maximize shareholder wealth. Critics have sought a more active role for shareholders in determining compensation levels of executives at public companies. One manifestation of this movement is the recent promulgation of stock exchange rules requiring shareholder approval of equity compensation plans. This Article examines these rules and the most prominent academic criticism of executive compensation. It concludes that the rules do not provide satisfactory resolution for any side of the debate over executive compensation and should be revised accordingly.

Number of Pages in PDF File: 41

Keywords: Equity Compensation, Listing Standards, Managerial Power, Shareholder Approval

JEL Classification: G34, G38, J33, K22, M52

Accepted Paper Series