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This paper examines the impact of enhanced executive remuneration disclosure rules and the introduction of dual voting rights under UK regulations of 2013 on the voting patterns of shareholders.
Based on a hand-collected dataset of the pay information disclosed by FTSE 350 companies from 2013-2017, we establish that shareholders guide their vote by top line salary figures and the recommendations of proxy advisors. We do not find any evidence that they assess the structure of a company’s remuneration policy comprehensively or penalize badly structured policies with their binding policy vote. Our results challenge the merits of imposing additional reporting costs on firms and introducing complex say on pay regulations.
In the wake of the 2008 Global Financial Crisis, the UK created the first stewardship code which was designed to transform its rationally passive institutional investors into actively engaged shareholders. In the UK corporate governance context,...Read more
Since the UK adopted the world’s first stewardship code in 2010, stewardship codes have proliferated across Asia. Given the UK Code’s prominence, it is tempting to assume that every other stewardship code preforms the same function as the UK Code...Read more
By the end of the twentieth century, the then-dominant literature on “law and finance” assumed that concentrated ownership was a product of deficient legal systems that did not sufficiently protect outside investors. At the same time,...Read more
We are witnessing a quiet but quick transformation of corporate governance. The rise of digital technologies and social media are forcing companies to reconsider how they organize themselves and structure firm governance.
What is...Read more