Shareholder activism and CEO pay

Yonca Ertimur, Fabrizio Ferri, Volkan Muslu

Research output: Contribution to journalArticlepeer-review

164 Scopus citations


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 languageEnglish (US)
Pages (from-to)535-592
Number of pages58
JournalReview of Financial Studies
Issue number2
StatePublished - Feb 2011
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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