Abstract

http://ssrn.com/abstract=2358696
 


 



Does Shareholder Scrutiny Affect Executive Compensation? Evidence from Say-on-Pay Voting


Mathias Kronlund


University of Illinois at Urbana-Champaign

Shastri Sandy


University of Missouri

April 15, 2015


Abstract:     
As a result of the Dodd-Frank Act of 2010, public firms must periodically hold advisory shareholder votes on executive compensation ("say-on-pay"). We examine if firms change the structure of compensation when faced with a vote. Our identification strategy exploits within-firm variation among companies that hold votes every two or three years, thus providing a predetermined cyclical voting schedule. When faced with a vote, firms reduce salaries and golden parachutes to CEOs, but increase equity pay and pensions. On net, total pay is higher. Shareholder scrutiny can thus cause firms to focus on the "optics" of compensation, and contrary to the intended goal of say-on-pay regulation, result in higher pay.

Number of Pages in PDF File: 66

Keywords: Say on pay, executive compensation, CEOs, Dodd-Frank, shareholder voice


Open PDF in Browser Download This Paper

Date posted: November 24, 2013 ; Last revised: April 16, 2015

Suggested Citation

Kronlund, Mathias and Sandy, Shastri, Does Shareholder Scrutiny Affect Executive Compensation? Evidence from Say-on-Pay Voting (April 15, 2015). Available at SSRN: http://ssrn.com/abstract=2358696 or http://dx.doi.org/10.2139/ssrn.2358696

Contact Information

Mathias Kronlund (Contact Author)
University of Illinois at Urbana-Champaign ( email )
1206 South Sixth Street
Champaign, IL 61820
United States
Shastri Sandy
University of Missouri ( email )
332 Cornell Hall
Columbia, MO Columbia 65211
United States
312-315-8395 (Phone)
Feedback to SSRN


Paper statistics
Abstract Views: 1,289
Downloads: 320
Download Rank: 59,879

© 2015 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.359 seconds