UK Binding Say on Pay - a Proposal Worth Critiquing
By MARK POERIO & ROSS MCNAUGHTON
UK-incorporated quoted (or, in U.S. terms, public) companies have reason to fear that binding say on pay (BSOP) could become a reality for general shareholder meetings held on and after October 1, 2013. That proposal comes from the UKs Department for Business, Innovation and Skills (BIS), and is set forth in a consultation document released on March 14th. From a business perspective, the BIS proposal threatens to result in a regime under which one failed shareholder vote could derail a companys ongoing operations and management incentives.
Because governance initiatives in one country have been going global at an increasingly rapid rate, companies ought to consider commenting on the BIS proposal before its April 27th deadline. Highlights of the BIS proposal and some preliminary thoughts appear in the following alert.