Remarks on Say on Pay: An Unjustified Incursion on Director Authority

12 Pages Posted: 4 Mar 2008 Last revised: 20 Mar 2008

Stephen M. Bainbridge

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

Abstract

These remarks were presented to the Penn Law and Economic Institute's Chancery Court Program on Say on Pay: A Positive Contribution To Corporate Effectiveness and Accountability Or An Unprincipled and Costly Incursion Into Director Authority?

Proponents of H.R.1257 or similar federal legislation entitling shareholders to vote on executive compensation must carry their burden of proving three distinct claims: First, that there is an executive compensation problem justifying legislative intervention. Second, say on pay is an effective solution to the problem. Third, that any such legislative intervention should be imposed at the federal level.

If any of these claims fail, the case for a federal say on pay law collapses. In these remarks, I hope to demonstrate that none of the three holds up to close examination.

Keywords: executive compensation, board of directors, shareholders, activists

JEL Classification: K22

Suggested Citation

Bainbridge, Stephen M., Remarks on Say on Pay: An Unjustified Incursion on Director Authority. UCLA School of Law, Law-Econ Research Paper No. 08-06. Available at SSRN: https://ssrn.com/abstract=1101688 or http://dx.doi.org/10.2139/ssrn.1101688

Stephen Mark Bainbridge (Contact Author)

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

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States
310-206-1599 (Phone)
310-825-6023 (Fax)

HOME PAGE: http://www.professorbainbridge.com

Paper statistics

Downloads
1,176
Rank
12,804
Abstract Views
4,666