Governance & Policy

Say on Pay

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Definition

Say on pay is a mechanism giving shareholders a vote on executive compensation — advisory in most jurisdictions (UK, US), binding in some (Switzerland, Netherlands, on policy) — typically covering the remuneration report annually and the remuneration policy periodically. Introduced in the UK in 2002 and mandated in the US by Dodd-Frank (2010), it has spread across Europe and other markets.

References

www.legislation.gov.ukBulk import source

Source imported for editorial provenance.

Source organisationSupporting reference

This reference provides supporting context for how “Say on Pay” is defined and used.

Overview

How it is used

The concept structures AGM agendas, proxy advisor recommendations, stewardship engagement on pay-for-performance and ESG metrics in incentives, and regulatory reporting of vote outcomes.

Why it matters

Say on pay is the precedent proving that advisory shareholder votes can discipline boards; governance mechanisms for sustainability accountability are built on it.