Say Pays! Shareholder Voice and Firm Performance

Vicente Cuñat, Mireia Gine and Maria Guadalupe ()
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Mireia Gine: University of Pennsylvania, WRDS, and IESE Business School

No 13-192, Upjohn Working Papers from W.E. Upjohn Institute for Employment Research

Abstract: This paper estimates the effect of increasing shareholder “voice” in corporations through a new governance rule that provides shareholders with a regular vote on pay: Say on Pay. We apply a regression discontinuity design to Say on Pay shareholder proposals to deal with prior expectations and the endogeneity of internal governance rules. Adopting Say on Pay leads to large increases in market value (5.4 percent), firm profitability, and long-term performance. In contrast, we find small effects on the level and structure of pay. This suggests that Say on Pay operates as a regular confidence vote, increasing efficiency, and market value.

Keywords: Agency Cost; Corporate Governance; Shareholder Meetings; Regression Discontinuity; Event Studies (search for similar items in EconPapers)
JEL-codes: D21 G14 G34 (search for similar items in EconPapers)
Date: 2013-02
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Citations: View citations in EconPapers (7)

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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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