There are many similarities and differences between Executive Compensation and Corporate Governance practice in the US compared with the UK. It is fair to summarise that US pay practices lead the US but that UK Corporate Governance leads the US and to a major extent has acted as a brake on excesses seen in the US.
The published and enforced guidelines of the Association of British Insurers (ABI) and the National Association of Pension Funds (NAPF) together with a hands-on approach of their members and other corporate governance activists has meant that UK companies have always thought of their shareholders before setting pay levels for their executives and have sought shareholder consent.
The letter of New York State Attorney General of 10 February 2009also available on this website at merrill letter.pdf sets out a fact pattern that is hard to imagine being capable of being replicated in the UK. It is worth reviewing just to see what can happen when common sense and investor guidelines are ignored.
