US: Say on pay - a first in America

The first "say on pay" vote on executive pay has taken place in America. Aflac - an insurance company - explained in its Annual Report why its board decided to provide shareholders with an advisory vote on directors' pay:

"We have a responsibility to listen to our shareholders, as they have placed their trust and financial resources in Aflac. After all, they own the company ... our shareholders have the right to know how executive compensation works, and ... we should provide a meaningful way for shareholders to give us input on our compensation practices. It’s as simple as that. Our shareholders tell us that we’re a very transparent and responsive organization, and Say-on-Pay is consistent with that approach. Our board of directors unanimously agreed. And we are proud to be the first company in the United States to adopt a resolution giving shareholders this type of advisory vote on compensation".

Over 90% of the votes cast supported the company's remuneration policy. For further information, see the following articles: The Wall Street Journal, The Financial Times, The Guardian. Senators McCain and Obama have criticised the level of directors' pay during their campaigns: see here.