What are the rules of Say On Pay?

In the corporate world, the rules of Say on Pay are rules that allow shareholders to vote on compensatory packages offered by the company leader. Such rules are not present in all countries, but in those where they are, the principles of "say on paying" can be binding or bland. Critics of the administration and management of companies are generally considered to be non -binding rules for obvious reasons. The executives are inherently allowed to decide on their own compensation. Although they also have a trusting obligation to the parent company to lead the company's financial affairs in a manner that generates profit for shareholders, temptations to accept some special compensation can be attracted, especially if the executive performance believes it will not hurt the company. This includes salaries, bonuses and benefits such as health plans, company cars, housing and other benefits. Shareholders are sometimes surprised to learn about the considerable benefits that may be offeredThose top executives, including free premium tickets for sports events, opportunities to use the company aircraft and other benefits that do not seem to be directly related to the company's operation.

shareholders may find that the compensation is not reasonable and voted. If the resolution is binding, the Company must observe the vote and regulate the terms of the contract so as to meet the shareholders' concerns. One of the goals for "Say On Pay" is that the executives will be nervous about the particularly bold compensatory packages and too embarrassed to present them to the vote, which means they suggest more modest and suitable packages to achieve approval.

In the United States, "Say On Pay" was one of the conditions submitted to companies that participated in the TRABLED ASSETS Relief Program (TARP), which was developed in response to the financial crisis in 2008.According to the law, the companies that participated in this program had to provide their shareholders to vote on whether to accept or not to accept the rules "Say On Pay". It is not surprising that the US public greeted it, while the corporations vehemently protested and some companies decided not to participate to avoid limiting compensation structured to TARP legislation.