The Impact of Investor Horizon on Say-on-Pay Voting

British Journal of Management, Forthcoming

55 Pages Posted: 3 Apr 2015 Last revised: 15 Mar 2016

See all articles by Konstantinos Stathopoulos

Konstantinos Stathopoulos

The University of Manchester - Alliance Manchester Business School

Georgios Voulgaris

University of Manchester - Alliance Manchester Business School; Alliance Manchester Business School

Multiple version iconThere are 2 versions of this paper

Date Written: March 14, 2016

Abstract

Shareholder investment horizons have a significant impact on Say-on-Pay voting patterns. Short-term investors are more likely to avoid expressing opinion on executive pay proposals by casting an abstaining vote. They vote against board proposals on pay only in cases where the CEO already receives excessive pay levels. In contrast, long-term investors typically cast favourable votes. According to our findings, this is due to effective monitoring rather than collusion with the management. Overall, investor heterogeneity in terms of investment horizons helps explain Say-on-Pay voting, in particular the low levels of Say-on-Pay dissent, which have recently raised questions over the efficiency of this corporate governance mechanism.

Keywords: Say on Pay; Investor Horizon; Executive Pay; Corporate Governance

JEL Classification: G34; M21; M41

Suggested Citation

Stathopoulos, Konstantinos and Voulgaris, Georgios, The Impact of Investor Horizon on Say-on-Pay Voting (March 14, 2016). British Journal of Management, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2588636 or http://dx.doi.org/10.2139/ssrn.2588636

Konstantinos Stathopoulos

The University of Manchester - Alliance Manchester Business School ( email )

AMBS Building
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HOME PAGE: http://www.research.manchester.ac.uk/portal/K.Stathopoulos.html

Georgios Voulgaris (Contact Author)

University of Manchester - Alliance Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

Alliance Manchester Business School ( email )

Booth street west
Manchester, Greater manchester M15 6PB
United Kingdom

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