Say-on-Pay Judgments: The Two-Strikes Rule and the Pay-Performance Link

Accounting and Finance, Forthcoming

Posted: 31 Jul 2018

See all articles by Yimeng Liang

Yimeng Liang

Monash University

Robyn Moroney

RMIT University; Monash University - Department of Accounting

Michaela Rankin

Monash University

Date Written: June 15, 2018

Abstract

We undertake an experiment to explore shareholder voting behavior when the pay-performance link is weak or strong; and when there has (has not) been a first strike in the preceding year. We find shareholders are more supportive of a remuneration package evidencing a strong pay-performance link than a weak link. Further, shareholders are less supportive of a remuneration package when there has been a first strike in the preceding year than when there has not been a first strike. Importantly, we find that a first strike reduces the effect of the pay-performance link on voting intentions.

Keywords: say-on-pay; pay-performance link; executive remuneration; two-strikes rule

Suggested Citation

Liang, Yimeng and Moroney, Robyn and Rankin, Michaela, Say-on-Pay Judgments: The Two-Strikes Rule and the Pay-Performance Link (June 15, 2018). Accounting and Finance, Forthcoming , Available at SSRN: https://ssrn.com/abstract=3196810

Yimeng Liang

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

Robyn Moroney (Contact Author)

RMIT University ( email )

Melbourne
Australia

Monash University - Department of Accounting ( email )

PO Box 197
Caulfield East, Victoria 3145
Australia

Michaela Rankin

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

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