by Gwen Moritz
Posted 8/15/2011 12:00 am
Updated 2 years ago
Say-on-pay refers to a provision of the Dodd-Frank Wall Street Reform & Consumer Protection Act of 2010 that requires public companies to give shareholders a regular opportunity to express their opinion of pay packages granted to executives, although the vote is non-binding.
In this first year, shareholders had two decisions to make: Whether to approve the current pay packages and how often they wanted to cast such an advisory vote. The Securities & Exchange Commission allows say-on-pay votes to be every year, every other year or every three years.
The boards of directors of Arkansas companies were about evenly split on whether to seek opinions from shareholders as often as possible - every year - or as infrequently as possible by doing it every three years.
A survey released last month by the Towers Watson business consulting company found that nearly 80 percent of public companies said say-on-pay had little or no effect on their proxy season and only 17 percent were planning to change their core compensation programs.
"Most companies are breathing a sigh of relief now that the proxy season is over," Doug Friske, head of Towers Watson's executive compensation consulting practice, said in a press release about its survey.
Still to come as a result of the Dodd-Frank law are SEC regulations requiring companies to disclose the relationship of executive pay to company performance and requiring companies to "claw back" bonuses from executives - and even former executives - if it turns out that company financials contain significant errors. In late July the SEC pushed back the timeline for issuing the regulations, making it unclear whether they will be ready in time for the 2012 proxy season.