Say on pay laws 'driving reform of US executive pay policies'

The introduction of mandatory shareholder advisory voting on pay packages in the US resulted in shareholders at only 1.3 per cent of businesses in the country rejecting remuneration in the last 12 months.

This is according to a new report from the Conference Board, which revealed the main reason for rejecting pay increases was concern over specific packages, such as severance deals, Pensions & Investments reports.

Of the 2,704 firms that held votes on remuneration in the year to September 3rd 2011, shareholders at 37 companies blocked compensation, the research found.

Shareholders were found cast opposing votes due to a "perceived pay-and-performance disconnect", the report stated.

The findings echo those of a survey conducted by Towers Watson in July, which concluded the say-on-pay votes had little short-term effect on firms' operations.

However, the report also showed the majority of public corporations are considering implementing changes to how executive pay is determined for next year.