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Pre-empt Binding Say-on-Pay With Real Reform

Louis M. Thompson | February 14, 2012

If the United Kingdom adopts binding say-on-pay votes, can the United States be far behind?

There's a history of business regulation taking root in Britain and Europe and then migrating to the United States, especially in the field of corporate governance. Given that potential, what should U.S. public companies do to keep the idea of binding votes on executive compensation from drifting across the Atlantic?

Over the past decade executive compensation rose considerably in the United States and (although to a lesser extent) Britain. From 2009 to 2010, median pay for CEOs of S&P 500 companies jumped 35 percent to $8.4 million. In the United Kingdom median total compensation of FTSE 100 CEOs rose 5 percent during the same period to £4.2 million ($6.6 million.)

U.K. Secretary of State for Business Vince Cable recently told Parliament that the government...

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