Say pays! Shareholder voice and firm performance

Vicente Cuñat, Mireia Giné and Maria Guadalupe ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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 (4.6%) and to improvements in long-term 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 operates as a regular vote of confidence, increasing efficiency and market value.

Keywords: say-on-pay; shareholder voice; executive compensation; firm performance; governance (search for similar items in EconPapers)
JEL-codes: G34 L20 M12 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2013-11-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://eprints.lse.ac.uk/55406/ Open access version. (application/pdf)

Related works:
Journal Article: Say Pays! Shareholder Voice and Firm Performance (2016)
Working Paper: Say pays! Shareholder voice and firm performance (2016)
Working Paper: Say Pays! Shareholder Voice and Firm Performance (2014)
Working Paper: Say Pays! Shareholder Voice and Firm Performance (2014)
Working Paper: Say Pays! Shareholder Voice and Firm Performance (2013)
Working Paper: Say Pays! Shareholder Voice and Firm Performance (2013)
Working Paper: Say Pays! Shareholder Voice and Firm Performance (2013)
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