Executive pay is remarkably resilient. For all the regulator angst, public opprobrium and remuneration committees, bosses keep earning more. Last year pay for those running S&P 500 companies rose 7 per cent to an average $15.3m, nearly 300 times that of the median worker.
Institutions that run investor funds, and thus indirectly underwrite company pay cheques, tend to focus their efforts elsewhere. Regulators have, over the years, sought to task investors with taking a tougher approach. The 2010 Dodd-Frank financial regulation, introduced at the end of the financial crisis, mandated non-binding votes on executive pay, or “say on pay” votes.
The UK started making noises on the subject in 1999 under Stephen Byers, trade and industry secretary at the time. It was the first country to bring in say-on-pay rules, initially as advisory votes before making them binding.