Say Pays! Shareholder Voice and Firm Performance

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• Mireia Giné
• Tuesday 02 June 2015, 10:30-12:00
• Cambidge Judge Business School, room W4.03.

If you have a question about this talk, please contact Crystal.

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.

This talk is part of the Finance & Accounting Seminar Series series.

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• CERF and CF Events
• Cambidge Judge Business School, room W4.03
• Finance & Accounting Seminar Series

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