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Talking Governance: Board-Shareowner Communications On Executive Compensation, Stephen Davis, Stephen Alogna

Ira M. Millstein Center for Global Markets and Corporate Ownership

Advantages stemming from board-shareowner communications on governance and executive pay outweigh the potential risks and costs of such dialogue. Regulation FD in the US should be seen as a caution rather than a barrier to such communication. Prompted by universal adoption of advisory ‘say on pay’ resolutions, UK companies have moved to integrate regular engagement with domestic investors into the annual process of framing corporate remuneration policies. Most US companies have not fully endeavored to engage their shareowners in the same manner, but some—motivated sometimes by crises—are experimenting with various models of dialogue. Companies can best manage effective engagement when …