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
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.
| Item Type: |
Article
|
| Official URL: |
http://rof.oxfordjournals.org/ |
| 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: |
01 Apr 2024 08:23 |
| 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 |
| URI: |
http://eprints.lse.ac.uk/id/eprint/63331 |
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