Using ‘Mood Images’ in an Annual Report to Influence Shareholder Say-on-Pay Votes

48 Pages Posted: 28 Sep 2022

See all articles by Zan Li

Zan Li

Bayes Business School (formerly Cass), City, University of London

Pawel Bilinski

Bayes Business School, City University London

Jay Jung

City, University of London - Bayes Business School

Date Written: September 14, 2022

Abstract

We examine whether mood images—cosmetic and information-free graphical elements—in an annual report influence shareholder votes on the say-on-pay (SOP) proposals. Consistent with the cognitive dissonance theory, we find that on average mood images promote heuristic decision making and increase shareholder voting support for SOP proposal. However, in the presence of signals conflicting managers’ proposal, such as a proxy advisor’s investigation of the firm, mood images prompt a more critical evaluation of the SOP resolution by shareholders, which negates their positive effect on SOP resolution support. Our findings reveal the contingent nature of the effect mood images have on shareholder voting behavior.

Keywords: mood image, shareholder vote, proxy advisor, cognitive dissonance

JEL Classification: D72, G18, G38, M12

Suggested Citation

Li, Zan and Bilinski, Pawel and Jung, Jay Heon, Using ‘Mood Images’ in an Annual Report to Influence Shareholder Say-on-Pay Votes (September 14, 2022). Available at SSRN: https://ssrn.com/abstract=4222416 or http://dx.doi.org/10.2139/ssrn.4222416

Zan Li (Contact Author)

Bayes Business School (formerly Cass), City, University of London ( email )

United Kingdom

Pawel Bilinski

Bayes Business School, City University London ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Jay Heon Jung

City, University of London - Bayes Business School ( email )

United Kingdom

HOME PAGE: http://www.jayheonjung.com/

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