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

131 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

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