Abstract

http://ssrn.com/abstract=1420394
 
 

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Say on Pay Votes and CEO Compensation: Evidence from the UK


Fabrizio Ferri


Columbia Business School - Accounting, Business Law & Taxation

David A. Maber


University of Michigan, Stephen M. Ross School of Business

November 24, 2011

Review of Finance, Forthcoming

Abstract:     
We examine the effect of say on pay regulation in the United Kingdom (UK). Consistent with the view that shareholders regard say on pay as a value-creating mechanism, the regulation’s announcement triggered a positive stock price reaction at firms with weak penalties for poor performance. UK firms responded to negative say on pay voting outcomes by removing controversial CEO pay practices criticized as rewards for failure (e.g., generous severance contracts) and increasing the sensitivity of pay to poor realizations of performance.

Number of Pages in PDF File: 62

Keywords: say on pay, shareholder votes, CEO compensation, shareholder activism

JEL Classification: G34, G38, J33, M12

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Date posted: April 26, 2010 ; Last revised: November 25, 2011

Suggested Citation

Ferri, Fabrizio and Maber, David A., Say on Pay Votes and CEO Compensation: Evidence from the UK (November 24, 2011). Review of Finance, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1420394

Contact Information

Fabrizio Ferri (Contact Author)
Columbia Business School - Accounting, Business Law & Taxation ( email )
3022 Broadway
New York, NY 10027
United States

David A. Maber
University of Michigan, Stephen M. Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI MI 48109
United States
HOME PAGE: http://www.dmaber.com
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