Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104650
Authors: 
Cuñat, Vicente
Giné, Mireia
Guadalupe, Maria
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers 8538
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%) 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 serves as a regular vote of confidence on the CEO, which leads to higher efficiency and market value.
Subjects: 
say-on-pay
corporate governance
executive compensation
JEL: 
G34
M52
Document Type: 
Working Paper

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