A Say on Pay shareholder proposal reportedly scored the highest level of support yet yesterday: 49.2 percent of the votes cast at Merck's annual meeting. That's still just shy of a majority vote - or is it? It isn't clear whether "votes cast" includes abstentions. If so, then support could actually have reached a majority of yes-and-no votes excluding abstentions. The company has declined to comment. Either way, with scores of shareholder proposals appearing on ballots - plus a Congressional bill that the House of Representatives passed last week - Say on Pay has become one of the hottest topics of this proxy season.

Several overseas markets - including the U.K., the Netherlands and Australia -already have legislation requiring companies to put their compensation reports or policies to shareholder votes. What lessons can we learn from their experience?

Institutional investors in those markets report positive impacts. The shareholder votes have strengthened dialogue with companies, tightened pay-for-performance links and reduced the likelihood of severance rewards for failure. It's true that there are market differences with the U.S., and votes on pay are not a panacea. But the experience abroad suggests that the practice can and should be transplanted to American soil.

Today we publish our research findings in a new study titled "What International Markets Say on Pay: An Investor Perspective."