Journal article
Shareholders’ Say on Pay: Does It Create Value?
Journal of financial and quantitative analysis, v 46(2), pp 299-339
Apr 2011
Abstract
Congress and activists recently proposed giving shareholders a say (vote) on executive pay. We find that when the House passed the Say-on-Pay Bill, the market reaction was significantly positive for firms with high abnormal chief executive officer (CEO) compensation, with low pay-for-performance sensitivity, and responsive to shareholder pressure. However, activist-sponsored say-on-pay proposals target large firms, not those with excessive CEO pay, poor governance, or poor performance. The market reacts negatively to labor-sponsored proposal announcements and positively when these proposals are defeated. Our findings suggest that say-on-pay creates value for companies with inefficient compensation but can destroy value for others.
Metrics
Details
- Title
- Shareholders’ Say on Pay: Does It Create Value?
- Creators
- Jie Cai - Drexel UniversityRalph A. Walkling - Drexel University
- Publication Details
- Journal of financial and quantitative analysis, v 46(2), pp 299-339
- Publisher
- Cambridge University Press
- Number of pages
- 41
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000290369100001
- Scopus ID
- 2-s2.0-79956110033
- Other Identifier
- 991019169351004721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Web of Science research areas
- Business, Finance
- Economics