Shareholder activism and CEO pay

Yonca Ertimur; Fabrizio Ferri; Volkan Muslu

doi:10.1093/rfs/hhq113

Shareholder activism and CEO pay

Yonca Ertimur, Fabrizio Ferri, Volkan Muslu

Research output: Contribution to journal › Article

143 Scopus citations

Abstract

We study 134 vote-no campaigns and 1,198 shareholder proposals related to executive pay between 1997 and 2007. Union pension funds sponsor most of these initiatives, yet their targeting criteria do not appear to reflect labor-related motives. Shareholders favor proposals related to the pay-setting process (e.g., subject severance pay to shareholder approval) over proposals that micromanage pay level or structure. While activists target firms with high CEO pay (whether excessive or not), voting support is higher only at firms with excess CEO pay. Firms with excess CEO pay targeted by vote-no campaigns experience a significant reduction in CEO pay ($7.3 million). Our findings contribute to the debate on "say on pay" and other reforms empowering shareholders.

Original language	English (US)
Pages (from-to)	535-592
Number of pages	58
Journal	Review of Financial Studies
Volume	24
Issue number	2
DOIs	https://doi.org/10.1093/rfs/hhq113
State	Published - Feb 1 2011
Externally published	Yes

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics

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Ertimur, Y., Ferri, F., & Muslu, V. (2011). Shareholder activism and CEO pay. Review of Financial Studies, 24(2), 535-592. https://doi.org/10.1093/rfs/hhq113

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