Answering the Say for No Pay

39 Pages Posted: 7 Aug 2016

See all articles by Christoph Van der Elst

Christoph Van der Elst

Tilburg Law School; Ghent University - Department of Business Law; European Corporate Governance Institute (ECGI)

Date Written: August 1, 2016


Say on pay is considered an important tool to mitigate inappropriate remuneration practices. Over the years, many countries provided shareholders with this say on pay-tool, although often the vote is exclusively of an advisory nature. We analyse the regulatory framework of say on pay in two of these countries, the UK and Belgium. We provide evidence on the evolution of the dissenting votes of the remuneration report and identify the companies that experienced a disapproved remuneration report. We assess the effect of this dissenting vote by analysing the subsequent remuneration report and shareholders’ vote as well as the evolution of the stock price. Although there are only limited guidelines how to address the dissenting vote and how to compile an adequate response, we found that many companies adjusted their remuneration practices, in particular the disclosing of pay-related information and amending bonus schemes. Remuneration levels are generally not adjusted. However, not all companies responded to the discontentment of the shareholders. The shareholders often positively react on the presented amendments in the subsequent vote of the remuneration report, but shareholder remain critical. Some subsequent shareholder approvals are hard to interpret. The research shows that say on pay positively affects communication between shareholders and companies but more is to be done on guiding the information exchange. We provide in a number of suggestions thereto.

Keywords: Say on pay, shareholder votes, CEO compensation, shareholder activism, disclosure

JEL Classification: K22, G34, G38, J33, M12

Suggested Citation

Van der Elst, Christoph, Answering the Say for No Pay (August 1, 2016). Tilburg Law School Research Paper No. 12/2016, European Corporate Governance Institute (ECGI) - Law Working Paper No. 325/2016, Available at SSRN: or

Christoph Van der Elst (Contact Author)

Tilburg Law School ( email )

Tilburg, 5000 LE

Ghent University - Department of Business Law ( email )

Universiteitstraat 4
Gent, B-9000

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

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