Management Influence on Investors: Evidence from Shareholder Votes on the Frequency of Say on Pay

Fabrizio Ferri, David Oesch

Research output: Contribution to journalArticle

13 Scopus citations


The literature on shareholder voting has mostly focused on the influence of proxy advisors on shareholder votes. We exploit a unique empirical setting enabling us to provide a direct estimate of management's influence. Analyzing shareholder votes on the frequency of future say on pay (SOP) votes, we find that a management recommendation for a particular frequency is associated with a 26 percent increase in voting support for that frequency. Additional tests suggest that the documented association is likely to capture a causal effect. Management influence varies across firms and is smaller at firms where perceived management credibility is lower. Compared to firms adopting an annual frequency, firms following management's recommendation to adopt a triennial frequency are significantly less likely to change their compensation practices in response to an adverse SOP vote, consistent with the notion that a less frequent vote results in lower management accountability.

Original languageEnglish (US)
Pages (from-to)1337-1374
Number of pages38
JournalContemporary Accounting Research
Issue number4
StatePublished - Dec 1 2016


ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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