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Say Pays! Shareholder Voice and Firm Performance

Vicente Cuñat (), Mireia Giné and Maria Guadalupe ()

Review of Finance, 2016, vol. 20, issue 5, 1799-1834

Abstract: This article estimates the effects of Say-on-Pay (SoP), a policy that increases shareholder "voice" by providing shareholders with a regular vote on executive pay. We apply a regression discontinuity design to the votes on shareholder-sponsored SoP proposals. Adopting SoP leads to large increases in market value (5%) and to improvements in long-term profitability. In contrast, it has limited effects on pay levels and structure. Taken together our results suggest that SoP can be seen as a repeated regular vote of confidence on the CEO and that it serves as a disciplining device.

Date: 2016
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Working Paper: Say pays! Shareholder voice and firm performance (2016) Downloads
Working Paper: Say Pays! Shareholder Voice and Firm Performance (2014) Downloads
Working Paper: Say Pays! Shareholder Voice and Firm Performance (2014) Downloads
Working Paper: Say pays! Shareholder voice and firm performance (2013) Downloads
Working Paper: Say Pays! Shareholder Voice and Firm Performance (2013) Downloads
Working Paper: Say Pays! Shareholder Voice and Firm Performance (2013) Downloads
Working Paper: Say Pays! Shareholder Voice and Firm Performance (2013) Downloads
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