As the folks at Corp Counsel observe, the UK is making a big thing about reining in exeuctive pay:
As I've blogged before, the United Kingdom has been on a path to revise its executive compensation laws to rein in excessive pay. Yesterday, the UK announced a slew of proposals that would push the envelope in the executive pay area - here are the proposals (or the closest thing I could find to them), as well as British Business Secretary Vince Cable's oral statement, a summary of responses to the related discussion paper and a comparison with the High Pay Commission's report that came out a few months ago (note that the HPC is not an independent commission; it's a left wing charity). And here is a Towers Watson memo, ISS blog and NY Times article discussing these proposals.
The proposed major changes include:
- Say-on-pay votes would be binding
- Approval threshold increased to 75% from 50%
- At least two compensation committee members would have no prior board experience
- Clawbacks of bonuses if executives failed
- Enhanced disclosures
It's notable that Britain's opposition party is quoted in media reports as criticizing these proposals as not going far enough!
The Basel Committee is also worrying about executive pay in financial intermediaries. I think this stuff is evidence of a change in the driver of the debate of executive pay regulation. The American laissez faire perspective on pay was beginning to spread, to some consternation, to Europe and elsewhere. But if anything, I think that the post-crisis inclination of foreign countries to point to executive compensation as part of the problem may end up constraining the old American liberality ... through vehicles like Basel.
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