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Say pays! Shareholder voice and firm performance

Cuñat, Vicente ORCID: 0000-0001-7504-2801, Giné, Mireia and Guadalupe, Maria (2016) Say pays! Shareholder voice and firm performance. Review of Finance, 20 (5). 1799 - 1834. ISSN 1572-3097

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Identification Number: 10.1093/rof/rfv056


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.

Item Type: Article
Official URL:
Additional Information: © 2015 The Authors
Divisions: Finance
Financial Markets Group
Subjects: H Social Sciences > HG Finance
JEL classification: G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency; Event Studies
G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General
G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
G - Financial Economics > G3 - Corporate Finance and Governance > G38 - Government Policy and Regulation
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J33 - Compensation Packages; Payment Methods
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification and Scope, Age, Profit, and Sales
Date Deposited: 26 Aug 2015 13:06
Last Modified: 20 Oct 2021 02:17
Projects: ECO2011-24928, ECO2010-17158
Funders: W.E. Upjohn Institute for Employment, Spanish Spanish, Banc Sabadell, Bank of Spain's Program of Excellence in Research

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