The Importance of Shareholder Activism: The Case of Say-on-Pay

Corporate Governance: An International Review, Forthcoming

36 Pages Posted: 27 Jul 2018

See all articles by Konstantinos Stathopoulos

Konstantinos Stathopoulos

The University of Manchester - Alliance Manchester Business School

Georgios Voulgaris

University of Warwick - Warwick Business School

Multiple version iconThere are 2 versions of this paper

Date Written: October 12, 2015

Abstract

This study focuses on the role of Say-on-Pay as a mechanism that aims to promote the efficiency of corporate governance by providing an additional channel for the expression of shareholder “voice”. Initially introduced in the UK, Say-on-Pay has subsequently been adopted in a large number of countries and it has recently received significant attention from regulators, media and the general public. The purpose of this study is to review prior literature related to Say-on-Pay and its impact on firm value and corporate decision-making. Our study highlights the interdisciplinary nature of research on Say-on-Pay. We also shed light on conceptual gaps and empirical discrepancies in prior studies, indicating that many questions linked to Say-on-Pay and its importance for the executive pay-setting process remain largely unanswered. At a theoretical level, we highlight potential areas for development of the existing theoretical framework for Say-on-Pay, which is at present rather limited and primarily influenced by agency theory. At an empirical level, we propose a substantial number of avenues for fruitful future research on this topic. In the light of recent proposals for extending the role of Say-on-Pay within the corporate governance framework, our findings are particularly relevant to regulators. More thought is needed about changing its nature from advisory to mandatory, since the degree of its effectiveness and the dynamics of the voting process are still unclear. Our study could also be informative for the media and the general public, especially given the increasing attention afforded to Say-on-Pay.

Keywords: Corporate Governance; Say-on-Pay; Shareholder Activism; Shareholder Voting

Suggested Citation

Stathopoulos, Konstantinos and Voulgaris, Georgios, The Importance of Shareholder Activism: The Case of Say-on-Pay (October 12, 2015). Corporate Governance: An International Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3207151

Konstantinos Stathopoulos (Contact Author)

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

MBS Crawford
Oxford Road
Manchester, M15 6PB
United Kingdom
+44 161 275 6863 (Phone)
+44 161 275 4023 (Fax)

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

Georgios Voulgaris

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

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