Say on pay votes and CEO compensation: Evidence from the UK

Fabrizio Ferri; David A. Maber

doi:10.1093/rof/rfs003

Say on pay votes and CEO compensation: Evidence from the UK

Fabrizio Ferri, David A. Maber

Research output: Contribution to journal › Article › peer-review

136 Scopus citations

Abstract

We examine the effect of say on pay regulation in the UK. Consistent with the view that shareholders regard say on pay as a value-creating mechanism, the regulation's announcement triggered a positive stock price reaction at firms with weak penalties for poor performance. UK firms responded to negative say on pay voting outcomes by removing controversial CEO pay practices criticized as rewards for failure (e.g., generous severance contracts) and increasing the sensitivity of pay to poor realizations of performance.

Original language	English (US)
Pages (from-to)	527-563
Number of pages	37
Journal	Review of Finance
Volume	17
Issue number	2
DOIs	https://doi.org/10.1093/rof/rfs003
State	Published - Apr 1 2013
Externally published	Yes

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

Access to Document

10.1093/rof/rfs003

Cite this

@article{adc2fe68f9bf46539f9e157a853e4e6c,

title = "Say on pay votes and CEO compensation: Evidence from the UK",

abstract = "We examine the effect of say on pay regulation in the UK. Consistent with the view that shareholders regard say on pay as a value-creating mechanism, the regulation's announcement triggered a positive stock price reaction at firms with weak penalties for poor performance. UK firms responded to negative say on pay voting outcomes by removing controversial CEO pay practices criticized as rewards for failure (e.g., generous severance contracts) and increasing the sensitivity of pay to poor realizations of performance.",

author = "Fabrizio Ferri and Maber, {David A.}",

year = "2013",

month = apr,

day = "1",

doi = "10.1093/rof/rfs003",

language = "English (US)",

volume = "17",

pages = "527--563",

journal = "Review of Finance",

issn = "1572-3097",

publisher = "Oxford University Press",

number = "2",

}

TY - JOUR

T1 - Say on pay votes and CEO compensation

T2 - Evidence from the UK

AU - Ferri, Fabrizio

AU - Maber, David A.

PY - 2013/4/1

Y1 - 2013/4/1

N2 - We examine the effect of say on pay regulation in the UK. Consistent with the view that shareholders regard say on pay as a value-creating mechanism, the regulation's announcement triggered a positive stock price reaction at firms with weak penalties for poor performance. UK firms responded to negative say on pay voting outcomes by removing controversial CEO pay practices criticized as rewards for failure (e.g., generous severance contracts) and increasing the sensitivity of pay to poor realizations of performance.

AB - We examine the effect of say on pay regulation in the UK. Consistent with the view that shareholders regard say on pay as a value-creating mechanism, the regulation's announcement triggered a positive stock price reaction at firms with weak penalties for poor performance. UK firms responded to negative say on pay voting outcomes by removing controversial CEO pay practices criticized as rewards for failure (e.g., generous severance contracts) and increasing the sensitivity of pay to poor realizations of performance.

UR - http://www.scopus.com/inward/record.url?scp=84874230238&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84874230238&partnerID=8YFLogxK

U2 - 10.1093/rof/rfs003

DO - 10.1093/rof/rfs003

M3 - Article

AN - SCOPUS:84874230238

VL - 17

SP - 527

EP - 563

JO - Review of Finance

JF - Review of Finance

SN - 1572-3097

IS - 2

ER -

Say on pay votes and CEO compensation: Evidence from the UK

Abstract

ASJC Scopus subject areas

Access to Document

Other files and links

Fingerprint

Cite this