The Advisors' Blog

– Mark Poerio, Paul Hastings

This posting on Harvard Law’s “Corporate Governance Blog” describes a new “Say Before Pay” law that took effect in Israel about a month ago. The authors advised the Justice Department’s committee that formulated Israel’s executive compensation reform. Although not going so far as to require binding say on pay, Israel has injected a twist in that the shareholder advisory vote on executive compensation – and CEO employment agreements – must occur before they become final. As described in the blog, Israel’s law reflects US and UK rules relating to compensation committee independence, as well as policies favoring clawbacks and long-term performance-based compensation that takes risk into consideration. These practices are consistently being endorsed as executive compensation controls continue to go global . . . with all trending toward more and more shareholder empowerment.