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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 (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.

JEL-codes: G14 G30 G34 G38 J33 L25 (search for similar items in EconPapers)
Date: 2016-08-01
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Published in Review of Finance, 1, August, 2016, 20(5), pp. 1799 - 1834. ISSN: 1572-3097

Downloads: (external link)
http://eprints.lse.ac.uk/63331/ Open access version. (application/pdf)

Related works:
Journal Article: 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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