Vicente Cuñat, Mireia Giné, MARIA GUADALUPE Say Pays! Shareholder Voice and Firm Performance (01 Jan 2012) Available at ECGI: http://ecgi.global/working-paper/say-pays-shareholder-voice-and-firm-performance
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 (4.6%) 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 operates as a regular vote of confidence, increasing efficiency and market value.
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