Say-on-Pay Vote

A say-on-pay vote is the advisory shareholder vote on a company’s executive compensation, required at least once every three years for U.S. public companies under Section 951 of the Dodd-Frank Act and implemented in the SEC’s proxy rules. It is held at a shareholders’ meeting, and most large companies choose to hold it every year rather than at the minimum interval.

What shareholders are voting on is broader than a single pay figure. The resolution asks for advisory approval of the compensation of the company’s named executive officers as disclosed in the proxy under the SEC’s compensation disclosure rules — the Summary Compensation Table, the Compensation Discussion and Analysis, and the related award and severance tables read together. A vote in favor is not approval of one salary or one grant; it is a single resolution covering the group and the program as described.

The vote is paired with a second required question. At least once every six years, a company must hold a separate advisory vote on how frequently the say-on-pay vote should occur — every year, every two years, or every three years — and the board then adopts a cadence in light of the result. That cadence is why a company that votes triennially has no say-on-pay result in the years between: the vote is not due, rather than absent or failed.

The vote does not bind the company. Whatever the outcome, the board retains the authority to make and stand by its pay decisions, and a failed or low vote does not void an award, reduce a payment or trigger any clawback. What the vote produces is a public record: the result is filed, reported and comparable with prior years, and a result materially short of the company’s own prior support — particularly when it falls short in consecutive years — is generally read by investors and proxy advisers as a signal that something about the program has drawn objection.

Companies that receive such a result typically respond in the next proxy. The Compensation Discussion and Analysis is where that response is usually disclosed, describing the shareholder engagement that followed, the concerns raised, and any changes the committee made or declined to make. That disclosure is not a rule-mandated formula, so its depth varies by company — which is itself worth noticing, since a company that describes its engagement in detail and one that does not are giving a reader different amounts to work with.

The support figure should be read with its denominator in mind. Companies report support as a share of the votes cast, and what counts as cast is not uniform: some report the result against votes for and against only, others include abstentions in the denominator, and broker non-votes are not counted as either. A single approval percentage from two companies is not always measuring the same thing unless the voting standard behind it is checked, and comparing a company’s own result across years is only meaningful if the standard has stayed the same.

Several factors move a result, and none of them maps cleanly onto whether the pay levels were high. A misalignment between reported pay and company performance as measured by a proxy adviser’s own framework, a large one-time or retention award, a change to the compensation peer group, a new chief executive’s sign-on package, or a perceived failure to respond to the prior year’s vote can each draw recommendations against and lower support. Proxy advisory firms publish their own analytical frameworks and make recommendations, but the vote itself belongs to the shareholders who cast it.

The say-on-pay vote also sits on a ballot that usually contains other compensation questions with different effects. A proposal to approve additional shares for an equity incentive plan is generally a binding vote with a different consequence from a failed advisory one; a separate advisory vote on golden parachute payments arises in transaction proxies; the frequency vote sets the cadence rather than endorsing the program. Reading a company’s compensation ballot as a single verdict blurs questions that are answered separately.

At its July 21, 2026 annual meeting, DXC's say-on-pay proposal received 50.0% shareholder support.