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Shareholder Power: Say-on-Pay


Recent Developments in the US: Dodd Frank Act, section 951, requires companies to approach shareholders for their non-binding vote on executive compensation and golden parachutes.
Recent Developments in the UK: A new proposal would require companies to approach their shareholders for a binding vote on executive pay.
Existing Position in India: Managerial remuneration has been historically restricted to a substantial extent. Subject to profitability of the company, senior management’s pay is subject to quantitative restrictions, to shareholders’ approval and often even to Central Government approval, all determined on the basis of sections 198, 269 and 309 and Schedule XIII of the Companies Act.
If the movements in the US and UK arose due to less regulation of executive pay, the grouse on the Indian side has been one of excessive regulation.