Navigating Shareholder Influence: Compensation Plans and the Shareholder Approval Process
Academy of Management Perspectives, 22(1): 41-57, 2008
17 Pages Posted: 25 Jan 2014
Date Written: February 1, 2008
Corporate governance research emphasizes the influence of institutional owners on company outcomes such as strategic decisions, organizational structures, and executive compensation. However, little is known about the process companies use to gain support for management-sponsored compensation plan resolutions. This article reviews prior literature linking institutional ownership and compensation practices and investigates the little-studied process of how management tries to work with owners to secure shareholder approval of compensation plans. In addition, it provides brief cases of two Fortune 300 companies (General Mills and PepsiCo) that received positive votes on their compensation plans. The article ends with several recommendations for managers trying to gain institutional owners' approval of future compensation plans.
Keywords: Executive compensation, shareholder influence, shareholder approval of equity based plans
JEL Classification: G3
Suggested Citation: Suggested Citation