Say-on-Pay Voting and CEO Compensation Structure

53 Pages Posted: 18 Aug 2018 Last revised: 30 Aug 2018

See all articles by Andrea Pawliczek

Andrea Pawliczek

University of Missouri at Columbia - School of Accountancy

Date Written: August 17, 2018


I examine how the structure of CEO compensation affects Say-on-Pay (SOP) voting and how SOP outcomes influence subsequent changes to compensation structure. I find that voting dissent decreases as the percent of performance sensitive compensation including equity and non-equity incentive increases. Additionally, investors vote more favorably when equity comes in the form of performance-vested equity or stock options as opposed to time-vested restricted stock. Subsequent to higher levels of voting dissent, however, I do not find that firms make changes to align compensation structure with investor preferences for more performance sensitive compensation as expressed through prior voting. Instead, I find that firms with greater SOP voting dissent in the prior year tend to increase performance-vested equity and decrease stock options in CEO compensation. A 20% increase in votes “Against” in the prior year SOP vote is associated with a 3.9% increase in performance-vested equity as a percent of total compensation and a 2.3% decrease in stock options. These results demonstrate that, while SOP voting is influencing compensation structure, it is not clear that these changes are resulting in more performance sensitive compensation.

Keywords: Executive Compensation, Say-on-Pay, Shareholder Voting, Equity Compensation, Performance-Vested Equity

JEL Classification: G38, M12, M52

Suggested Citation

Pawliczek, Andrea, Say-on-Pay Voting and CEO Compensation Structure (August 17, 2018). Available at SSRN: or

Andrea Pawliczek (Contact Author)

University of Missouri at Columbia - School of Accountancy ( email )

420 Cornell Hall
Columbia, MO 65211
United States

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