Say on pay votes, subsequent firm performance, and CEO risk-taking behavior

Ayishat Omar; Huey Lian Sun; Alex P. Tang

doi:10.1002/jcaf.22559

Say on pay votes, subsequent firm performance, and CEO risk-taking behavior

Ayishat Omar, Huey Lian Sun, Alex P. Tang

Accounting & Finance

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

1 Scopus citations

Abstract

Say-on-pay empowers shareholders by mandating advisory voting on executive compensation during annual meetings. Extant literature maintains that the degree of effectiveness of SOP remains unclear. Using shareholder voting data from 2011 to 2015, we estimate regression models, and from our analysis, we find improved subsequent firm performance for higher SOP voting dissent observations. Furthermore, we find a positive association between SOP dissent vote and risk-taking. The findings suggest that managers take seriously the negative outcomes of SOP, especially the higher SOP voting dissent. This study contributes to the growing research on SOP votes, as it highlights some impact of SOP voting.

Original language	English (US)
Pages (from-to)	9-21
Number of pages	13
Journal	Journal of Corporate Accounting and Finance
Volume	33
Issue number	4
DOIs	https://doi.org/10.1002/jcaf.22559
State	Published - Oct 2022

All Science Journal Classification (ASJC) codes

Accounting
Economics, Econometrics and Finance(all)

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10.1002/jcaf.22559

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abstract = "Say-on-pay empowers shareholders by mandating advisory voting on executive compensation during annual meetings. Extant literature maintains that the degree of effectiveness of SOP remains unclear. Using shareholder voting data from 2011 to 2015, we estimate regression models, and from our analysis, we find improved subsequent firm performance for higher SOP voting dissent observations. Furthermore, we find a positive association between SOP dissent vote and risk-taking. The findings suggest that managers take seriously the negative outcomes of SOP, especially the higher SOP voting dissent. This study contributes to the growing research on SOP votes, as it highlights some impact of SOP voting.",

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Say on pay votes, subsequent firm performance, and CEO risk-taking behavior

Abstract

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