Do institutional investors monitor their large-scale vs. small-scale investments differently? Evidence from the say-on-pay vote

Miriam Schwartz-Ziv and Russ Wermers

Journal of Banking & Finance, 2022, vol. 141, issue C

Abstract: We examine the relation between an institution's stock ownership and its tendency to support corporate management through the “Say-on-Pay” (SOP) executive compensation vote. Institutional advisors are more likely to oppose management on the SOP vote for their small-scale investments, i.e., investments that comprise a small fraction of an institution's aggregate stockholdings across its funds, or, alternatively, investments that comprise a small fraction of the total equity market capitalization of a corporation. We find evidence indicating that this voting pattern reflects an institutions’ overall sentiment for the stock, and is particularly prevalent when institutions have limited attention to monitor their investments.

Keywords: Shareholder's votes; Say-on-pay; Institutional investors; Small shareholders (search for similar items in EconPapers)
JEL-codes: G30 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:141:y:2022:i:c:s0378426622001261

DOI: 10.1016/j.jbankfin.2022.106532

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