Management Influence on Investors: Evidence from Shareholder Votes on the Frequency of Say on Pay

• 成果类型: Article
• 署名作者: Ferri, Fabrizio; Oesch, David
• 署名单位: Columbia University; University of Zurich
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12228
• 发表日期: 2016
• 页码: 1337-1374
• 关键词: CORPORATE GOVERNANCE; institutional investors; executive-compensation; PROXY CONTESTS; Firm value; Activism; boards; news; credibility; performance

摘要

The literature on shareholder voting has mostly focused on the influence of proxy advisors on shareholder votes. We exploit a unique empirical setting enabling us to provide a direct estimate of management's influence. Analyzing shareholder votes on the frequency of future say on pay (SOP) votes, we find that a management recommendation for a particular frequency is associated with a 26 percent increase in voting support for that frequency. Additional tests suggest that the documented association is likely to capture a causal effect. Management influence varies across firms and is smaller at firms where perceived management credibility is lower. Compared to firms adopting an annual frequency, firms following management's recommendation to adopt a triennial frequency are significantly less likely to change their compensation practices in response to an adverse SOP vote, consistent with the notion that a less frequent vote results in lower management accountability.