About: Say on pay

Say on pay is a term used for a role in corporate law whereby a firm's shareholders have the right to vote on the remuneration of executives. Often described in corporate governance or management theory as an agency problem, a corporation's managers are likely to overpay themselves because, directly or indirectly, they are allowed to pay themselves as a matter of general management power. Directors are elected to a board that has a fiduciary duty to protect the interests of the corporation. In large listed companies, executive compensation will usually be determined by a compensation committee composed of board members. Proponents argue that “say on pay” reforms strengthen the relationship between the board of directors and shareholders, ensuring that board members fulfill their fiduciary