The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Sun, 11 Oct 2026 11:30:28 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.13 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Investors Need a Better Approach to Say on Pay Voting – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Investors Need a Better Approach to Say on Pay Voting https://corpgov.law.harvard.edu/2026/10/11/investors-need-a-better-approach-to-say-on-pay-voting/?utm_source=rss&utm_medium=rss&utm_campaign=investors-need-a-better-approach-to-say-on-pay-voting https://corpgov.law.harvard.edu/2026/10/11/investors-need-a-better-approach-to-say-on-pay-voting/#respond Sun, 11 Oct 2026 11:30:28 +0000 https://corpgov.law.harvard.edu/?p=184123?d=20261009164341EDT Posted by Stephen F. O’Byrne, Shareholder Value Advisors Inc, on Sunday, October 11, 2026
Editor's Note:

Stephen F. O’Byrne is President and Co-founder of Shareholder Value Advisors Inc. 

The new U.S. Pay versus Performance (PvP) disclosures make it practical for investors to have reasonable specific quantitative guidelines for Say on Pay (SOP) voting. Specific quantitative guidelines make the investor’s vote matter: portfolio companies can predict the investor’s SOP vote and change their pay design in a way that increases the likelihood of a positive vote.

In this article, I’ll show how the PvP data can be used to measure five pay dimensions at the individual company level and how these pay dimensions can be used to create reasonable specific quantitative guidelines: companies are assured of a positive SOP vote if (a) relative TSR explains at least half of the variation in relative CEO pay, (b) CEO pay leverage is statistically significant at the conventional 5% level, (c) CEO relative pay risk is reasonable (i.e., ≤2) and (d) the CEO pay premium cost of above median pay leverage is reasonable (i.e., ≤2).

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