Who Should Say on Pay and for the Sake of Whom in a Listed Company?

Abstract

<p> Listed companies' remuneration policies have been associated with bad corporate governance. It has been argued that managerial power is too strong, which leads to imbalance between pay and performance. As a solution, shareholders, possessing a special position in the mainstream theory, are increasingly empowered to say on pay. Because of the investors' high interest in short-term returns and the confusion the vote causes to the distribution of powers, the article challenges the feasibility of this shareholder primacy inspired action. In order for the company to contribute sustainable business, remuneration should be therefore built on companies' own long-term survival, not shareholder value, and supported with director primacy.</p>