Buzzword: Say on pay
A sure way to keep the CEO in check is by voting on how much they make. But some board rooms aren't welcoming the idea.
Empty boardroom (istockphoto.com)
A tug-of-war brings us this week's Marketplace Money buzzword: Say on pay.
Say on pay is a proposal that's making its way through Congress. Let's say you own part of a public company. They're looking for a CEO, and the wanna-be chief is pushing for big pay and cushy perks. Really? Say on pay would allow shareholders to vote on a CEO's salary. And even though the vote wouldn't be binding, it's still not welcome news around the board room.
Why? 'Cause it could make boards of directors look worse if they ignore shareholder wishes. So some boards have their own proposal for shareholders: Shut up already!
