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What are the objectives of the say-on-pay rule? Do you think that shareholders should be limited...

What are the objectives of the say-on-pay rule? Do you think that shareholders should be limited to taking an advisory vote or should shareholders be able to deter- 
mine an executive’s compensation? 


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Answer #1

The say-on-pay rule empowers the shareholders to vote with respect to the executive's compensation packages. This gives the shareholders authority to decide the remuneration of executives. However, this can often be misused. The managers may become biased and pay themselves higher compensation than they actually deserve. This can be extremely harmful for the organization as it would be a financial drain and cause unequal distribution of wealth. Therefore, I feel the shareholders should be limited to taking an advisory vote rather than determining the compensation package of executive,

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