What Was the Question? The NYSE and Nasdaq's Curious Listing Standards Requiring Shareholder Approval of Equity-Compensation Plans

Andrew C.W. Lund, Pace University School of Law

Document Type Article

Published at 39 Connecticut Law Review 119 (2006)


Executive pay packages are increasingly subject to the criticism that they do not maximize shareholder wealth. In response, critics have sought a more active role for shareholders in determining compensation levels of executives at public companies. One manifestation of this movement is the recent stock exchange rules requiring shareholder approval of equity compensation plans. This Article examines these rules and the most prominent academic criticisms of executive compensation. It concludes that the rules do not provide satisfactory resolution for any side of the debate over executive compensation and should be revised accordingly.