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Say Pays! Shareholder Voice and Firm Performance

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

No 10141, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper 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 (4%) and to improvements in longterm performance: profitability and labor productivity increase, while overheads and investment fall. In contrast, we find limited effects on pay levels and structure. This suggests that SoP serves as a regular vote of confidence on the CEO, that leads to higher efficiency and market value.

Keywords: corporate governance; executive compensation; Say-on-Pay (search for similar items in EconPapers)
JEL-codes: G34 M52 (search for similar items in EconPapers)
Date: 2014-09
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Related works:
Journal Article: Say Pays! Shareholder Voice and Firm Performance (2016) Downloads
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 (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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