Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98598
Authors: 
Cuñat, Vicente
Gine, Mireia
Guadalupe, Maria
Year of Publication: 
2013
Series/Report no.: 
Upjohn Institute Working Paper 13-192
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.
Subjects: 
Agency Cost
Corporate Governance
Shareholder Meetings
Regression Discontinuity
Event Studies
JEL: 
G34
D21
G14
Document Type: 
Working Paper

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