Say on Pay: Do Shareholders Care?
FMG Discussion Paper DP751
53 Pages Posted: 25 Jan 2016 Last revised: 7 Nov 2018
Date Written: June 25, 2018
This paper examines the impact of enhanced executive remuneration disclosure rules and the introduction of dual voting rights under UK regulations of 2013 on the voting patterns of shareholders. Based on a hand-collected dataset of the pay information disclosed by FTSE 350 companies from 2013-2017, we establish that shareholders guide their vote by top line salary figures and the recommendations of proxy advisors. We do not find any evidence that they assess the structure of a company’s remuneration policy comprehensively or penalise badly structured policies with their binding policy vote. Our results challenge the merits of imposing additional reporting costs on firms and introducing complex say on pay regulations.
Keywords: Executive remuneration, say-on-pay, disclosure regulation, shareholder voting
JEL Classification: G34, G38, K22
Suggested Citation: Suggested Citation