> allow a shareholder vote on this issue if requested by the
> shareholders. That's what "if requested" means.
Well, this is what I was asking about. Okay, so the vote is to be requested by the shareholders. How do they go about requesting it? Can one shareholder just shoot the board an email? Does that count as a request?
Maybe the answer is: shareholders can make a request through the normal channels by which shareholders can already request advisory votes. (Which in a given case would depend on the company's charter and the laws of the state of incorporation). But if that's the answer then the Treasury rules literally make no difference - if companies are only required to have non-binding votes when shareholders (1) already have the power to request non-binding votes (2) and then actually request a non-binding vote, then the Treasury rules didn't do anything. The company would have been required to hold the vote even without the rules.
This isn't completely academic. However weaselly a a mandatory non-binding vote is (as punitive measures go), it wouldn't necessarily have no effect. First of all, it would be embarrassing to push through a pay package against the explicit wishes of the shareholders, so boards would probably rein in some of their more generous impulses. Second, if suddenly dozens of major S&P companies were forced to hold non-binding votes on executive pay, it would have a politicizing effect on executive pay. This is where norms come in. The shareholder meetings where pay packages were debated would be covered in all the newspapers. Gradually the perception that executive pay is part of the "public sphere" - that it's the public's business - would likely grow.
But not if the rules literally do nothing.
SA