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Say Pays! Shareholder Voice and Firm Performance

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

FMG Discussion Papers from Financial Markets Group

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.

Date: 2013
New Economics Papers: this item is included in nep-hrm
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http://www.lse.ac.uk/fmg/workingPapers/discussionPapers/fmgdps/DP724.pdf (application/pdf)

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 (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
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