Is 'Say on Pay' Justified?

Bainbridge, Stephen M.

Abstract

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Is 'Say on Pay' Justified?

Stephen M. Bainbridge

University of California, Los Angeles (UCLA) - School of Law

2009

Regulation, Vol. 32, No. 1, pp. 42-47, Spring 2009
UCLA School of Law, Law-Econ Research Paper No. 09-19

Abstract:
There is growing political support for adopting a 'Say on Pay' requirement for executive compensation - that is, shareholders must sign off on executive compensation. This paper examines three premises fundamental to the 'Say on Pay; movement: that current executive compensation is unjustifiably high, that federal legislation is required to address that high compensation, and that federal legislation would be effective in this aim. The paper finds that all three claims are problematic.

Number of Pages in PDF File: 6

Keywords: federalism, say on pay, h.r. 1257, executive compensation, corporate governance, principal-agent dilemma, director primacy, shareholder activism

JEL Classification: D60, D70, G30, G34, G38, J33, L10, L21, M10

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Date posted: August 15, 2009 ; Last revised: September 22, 2009

Suggested Citation

Bainbridge, Stephen M., Is 'Say on Pay' Justified? (2009). Regulation, Vol. 32, No. 1, pp. 42-47, Spring 2009 ; UCLA School of Law, Law-Econ Research Paper No. 09-19. Available at SSRN: http://ssrn.com/abstract=1452761

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Stephen Mark Bainbridge (Contact Author)

University of California, Los Angeles (UCLA) - School of Law ( email )

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