Who is Asking the Shareholders? Voting on Management Compensation in German Listed Firms – Evidence from the Annual Meeting Season 2010 (Wer fragt die Aktionäre? - Abstimmung über das Vorstandsvergütungssystem: Erfahrungen aus der HV-Saison 2010)

HHL Research Paper Series in Corporate Governance No. 2

25 Pages Posted: 13 Dec 2010

See all articles by Marc Steffen Rapp

Marc Steffen Rapp

University of Marburg - School of Business & Economics; University of Marburg - Marburg Centre for Institutional Economics (MACIE)

Marco O. Sperling

University of Marburg - School of Business & Economics

Michael Wolff

University of Göttingen

Date Written: October 14, 2010

Abstract

Since 2010 the German law allows for non-binding votes on management compensation by shareholders during the annual meeting. In a broad study covering all non-financial German Prime Standard firms we examine determinants affecting (i) the likelihood of a voting and (ii) the result of a vote. We find that the probability of a voting increases with a higher free float and strong media exposure. The approval rate increases with the voting power of blockholders. Moreover the introduction of a new remuneration system also leads to a higher approval rate. We argue that the company’s administration is interested in legitimating the new remuneration system by allowing shareholder to vote and in avoiding reputational losses in case of non-voting.

Note: Downloadable document is in German.

Keywords: management compensation, remuneration, say-on-pay, corporate governance, Germany, shareholder meeting

JEL Classification: G30, G38, J30, J33

Suggested Citation

Rapp, Marc Steffen and Sperling, Marco O. and Wolff, Michael, Who is Asking the Shareholders? Voting on Management Compensation in German Listed Firms – Evidence from the Annual Meeting Season 2010 (Wer fragt die Aktionäre? - Abstimmung über das Vorstandsvergütungssystem: Erfahrungen aus der HV-Saison 2010) (October 14, 2010). HHL Research Paper Series in Corporate Governance No. 2. Available at SSRN: https://ssrn.com/abstract=1723155 or http://dx.doi.org/10.2139/ssrn.1723155

Marc Steffen Rapp (Contact Author)

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany

University of Marburg - Marburg Centre for Institutional Economics (MACIE) ( email )

Am Plan
Marburg, 35032
Germany

Marco O. Sperling

University of Marburg - School of Business & Economics ( email )

Am Plan 2
Marburg, D-35037
Germany

Michael Wolff

University of Göttingen ( email )

Platz der Göttinger Sieben 3
Göttingen, DE 37073
Germany

HOME PAGE: http://www.contolling.uni-goettingen.de

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