'Shareholders' Say on Pay

international experience and lessons for China

Zha Jinlong, Jenny FU

Research output: Contribution to journalArticle

Abstract

Executive compensation is a means to reduce agency costs and to motivate company executives. In practice however, the ever – expanding powers of executives destroy the effectiveness of corporate board as a mechanism to manage conflicts of interest. This further leads to the lack of pay – performance association and self – determination of remuneration by company executives. In this respect, in line with an increasing trend of shareholder democracy, many developed market economies have introduced various forms of shareholder vote on executive remuneration. This paper argues that China should establish its own system of Say on Pay by mandating a binding shareholder vote on proposed executive remuneration policy for current financial year and a non – binding vote on the implementation of the policy or past year through company legislation.
Original languageEnglish
Pages (from-to)30-46
Number of pages17
JournalJournal of Comparative Law
Volume145
Issue number3
Publication statusPublished - 2016

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Vote
Shareholders
International experience
China
Executive remuneration
Performance pay
Remuneration
Conflict of interest
Democracy
Self-determination
Market economy
Agency costs
Legislation
Executive compensation
Corporate boards

Cite this

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'Shareholders' Say on Pay : international experience and lessons for China. / Jinlong, Zha; FU, Jenny.

In: Journal of Comparative Law, Vol. 145, No. 3, 2016, p. 30-46.

Research output: Contribution to journalArticle

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JO - Bijiaofa Yanjiu - Journal of Comparative Law

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