Do Shareholder Say On Pay Impact Ceo Pay
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| Author | : Stephanie Austin-Campbell |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2022 |
| Genre | : |
| ISBN | : |
This paper will explore the research question: Do shareholder Say-on-pay (SoP) impact excessive executive compensation? Consequently, the essential sub-problems will also be addressed: Do shareholder SoP votes indicate a negative correlation to extremely high compensation? Moreover, how does the correlation impact the total compensation for CEOs? Compensation for CEOs has come under increased scrutiny and affected shareholders' voting patterns. The more negative the attention to corporate dealings, the more negatively shareholders vote on CEO compensation. This study takes a deep dive into the firms that are mandated to allow shareholders' vote. However, there is an opportunity for further analysis of firms that use a volunteer option. Further research can also include comparing and contrasting different geographical regions to examine any cultural differences that may affect the study's outcome. As public-traded firms are governed by the Dodd-Frank Act, future research must continually monitor the alignment of shareholders' and executives' goals to ensure the conversation stays current and that all parties have a vested interest.
| Author | : OECD |
| Publisher | : OECD Publishing |
| Total Pages | : 78 |
| Release | : 2011-07-01 |
| Genre | : |
| ISBN | : 9264116052 |
This report reflects long-term, in-depth discussion and debate by participants in the Latin American Roundtable on Corporate Governance.
| Author | : Lucian A. Bebchuk |
| Publisher | : Harvard University Press |
| Total Pages | : 308 |
| Release | : 2004 |
| Genre | : Business & Economics |
| ISBN | : 9780674020634 |
The company is under-performing, its share price is trailing, and the CEO gets...a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers' influence over their own pay--and of a governance system that must fundamentally change if firms are to be managed in the interest of shareholders. Lucian Bebchuk and Jesse Fried demonstrate that corporate boards have persistently failed to negotiate at arm's length with the executives they are meant to oversee. They give a richly detailed account of how pay practices--from option plans to retirement benefits--have decoupled compensation from performance and have camouflaged both the amount and performance-insensitivity of pay. Executives' unwonted influence over their compensation has hurt shareholders by increasing pay levels and, even more importantly, by leading to practices that dilute and distort managers' incentives. This book identifies basic problems with our current reliance on boards as guardians of shareholder interests. And the solution, the authors argue, is not merely to make these boards more independent of executives as recent reforms attempt to do. Rather, boards should also be made more dependent on shareholders by eliminating the arrangements that entrench directors and insulate them from their shareholders. A powerful critique of executive compensation and corporate governance, Pay without Performance points the way to restoring corporate integrity and improving corporate performance.
| Author | : Ira T. Kay |
| Publisher | : CRC Press |
| Total Pages | : 161 |
| Release | : 2024-11-01 |
| Genre | : Business & Economics |
| ISBN | : 104029264X |
U.S. executive pay, particularly that of CEOs, has been under serious attack for nearly a decade. Despite the fact that tying executive performance and pay to stock price has appeared to have substantially benefited the U.S. economy, this criticism has not subsided. CEO Pay and Shareholder Value challenges some assumptions behind this criticism by addressing these pertinent questions and more:
| Author | : G. Constantinides |
| Publisher | : Elsevier |
| Total Pages | : 698 |
| Release | : 2003-11-04 |
| Genre | : Business & Economics |
| ISBN | : 9780444513632 |
Arbitrage, State Prices and Portfolio Theory / Philip h. Dybvig and Stephen a. Ross / - Intertemporal Asset Pricing Theory / Darrell Duffle / - Tests of Multifactor Pricing Models, Volatility Bounds and Portfolio Performance / Wayne E. Ferson / - Consumption-Based Asset Pricing / John y Campbell / - The Equity Premium in Retrospect / Rainish Mehra and Edward c. Prescott / - Anomalies and Market Efficiency / William Schwert / - Are Financial Assets Priced Locally or Globally? / G. Andrew Karolyi and Rene M. Stuli / - Microstructure and Asset Pricing / David Easley and Maureen O'hara / - A Survey of Behavioral Finance / Nicholas Barberis and Richard Thaler / - Derivatives / Robert E. Whaley / - Fixed-Income Pricing / Qiang Dai and Kenneth J. Singleton.
| Author | : Jennifer Carpenter |
| Publisher | : Springer Science & Business Media |
| Total Pages | : 159 |
| Release | : 2013-04-17 |
| Genre | : Business & Economics |
| ISBN | : 1475751923 |
Executive compensation has gained widespread public attention in recent years, with the pay of top U.S. executives reaching unprecedented levels compared either with past levels, with the remuneration of top executives in other countries, or with the wages and salaries of typical employees. The extraordinary levels of executive compensation have been achieved at a time when U.S. public companies have realized substantial gains in stock market value. Many have cited this as evidence that U.S. executive compensation works well, rewarding managers who make difficult decisions that lead to higher shareholder values, while others have argued that the overly generous salaries and benefits bear little relation to company performance. Recent conceptual and empirical research permits for the first time a truly rigorous debate on these and related issues, which is the subject of this volume.
| Author | : Jie Cai |
| Publisher | : |
| Total Pages | : 58 |
| Release | : 2011 |
| Genre | : |
| ISBN | : |
Congress and activists recently proposed to give shareholders an advisory vote on executive compensation, i.e. say-on-pay. Proponents argue that say-on-pay further aligns owner-manager interests. Opponents worry that shareholder vote will restrict the board and management and inhibit their ability to design optimal compensation. We perform three experiments to analyze the benefits and costs of say-on-pay. First, the Say-on-Pay Bill passed the House of Representatives on April 20, 2007. Using the abnormal return of 1,270 firms surrounding the bill passage, we document a significantly positive reaction from firms with high abnormal CEO compensation and low pay for performance. Firms more likely to implement changes under shareholder pressure also react positively. Given the uncertainty surrounding this bill, these results may understate the actual impact of the legislation. Second, using 49 firms receiving shareholder sponsored say-on-pay proposals, we find that these companies are unlikely to benefit. They appear to be targeted for their large size rather than overpaid CEO or poor governance or performance. Their stock price reacts negatively to proposal announcement, especially when the proposal is sponsored by labor unions. When shareholders defeat these proposals, the market reacts positively, and the reaction increases with more opposing votes. Our third test examines the relation of previous votes on executive incentive compensation plans and abnormal CEO pay. Overall, our findings suggest that the market views say-on-pay as value-creating for companies with inefficient executive compensation and relatively poor governance but value-destroying for other companies. These results provide important evidence for the current debate regarding say-on-pay.
| Author | : Benjamin Hermalin |
| Publisher | : Elsevier |
| Total Pages | : 762 |
| Release | : 2017-09-18 |
| Genre | : Business & Economics |
| ISBN | : 0444635408 |
The Handbook of the Economics of Corporate Governance, Volume One, covers all issues important to economists. It is organized around fundamental principles, whereas multidisciplinary books on corporate governance often concentrate on specific topics. Specific topics include Relevant Theory and Methods, Organizational Economic Models as They Pertain to Governance, Managerial Career Concerns, Assessment & Monitoring, and Signal Jamming, The Institutions and Practice of Governance, The Law and Economics of Governance, Takeovers, Buyouts, and the Market for Control, Executive Compensation, Dominant Shareholders, and more. Providing excellent overviews and summaries of extant research, this book presents advanced students in graduate programs with details and perspectives that other books overlook. - Concentrates on underlying principles that change little, even as the empirical literature moves on - Helps readers see corporate governance systems as interrelated or even intertwined external (country-level) and internal (firm-level) forces - Reviews the methodological tools of the field (theory and empirical), the most relevant models, and the field's substantive findings, all of which help point the way forward
| Author | : Steven Clifford |
| Publisher | : Penguin |
| Total Pages | : 289 |
| Release | : 2017 |
| Genre | : Business & Economics |
| ISBN | : 0735212392 |
"The pay gap between chief executive officers of major U.S. firms and their workers is higher than ever before--depending on the method of calculation, CEOs get paid between 300 and 700 times more than the average worker. Such outsized pay is a relatively recent phenomenon, but ... few detractors truly understand the numerous factors that have contributed to the dizzying upward spiral in CEO compensation. Steven Clifford, a former CEO who has also served on many corporate boards, has a name for these procedures and practices: 'The CEO Pay Machine.' [This book] is Clifford's ... explanation of the 'machine'--how it works, how its parts interact, and how every step pushes CEO pay to higher levels"--
| Author | : Stephania Mason |
| Publisher | : |
| Total Pages | : 94 |
| Release | : 2015 |
| Genre | : Corporate governance |
| ISBN | : |
For the last two decades there has been quite a bit of debate about whether executives receive excessive compensation and if so, how to control it. A number of countries have instituted some type of Say on Pay rules, affording shareholders the right to vote on executive compensation. Much of this regulatory activity and debate is predicated on the notion that shareholder voting actually influences executive compensation for the better. Although Say on Pay continues to grow as a regulatory tool, the effectiveness of it as a mechanism to effect change remains an open and controversial question, and academic research has been inconclusive. Some prior studies find no change in the level of CEO pay around the adoption of Say on Pay in the U.S. and the U.K. (e.g., see Ferri & Maber (2013) for the U.K. and Iliev & Vitanova (2013) for the U.S.), whereas other studies provide strong evidence that Say on Pay is associated with lower CEO pay. (e.g., see Correa & Lel (2013)). The primary purpose of this dissertation is to investigate the impact of Say on Pay by addressing an important question: Do firms alter executive compensation after the enactment of Say on Pay? I conduct a meta-analysis on the impact of Say on Pay on executive compensation, comprising prior tests derived from 29 primary studies. Impact is measured for the firm by comparing the level of executive compensation and its growth rate; pay-performance sensitivity; pay dispersion (between the CEO and other top executives); and composition of executive compensation in the pre- and post-Say on Pay periods. I find that Say on Pay does not reduce executive compensation; however it does change the composition of the compensation. These results are inconsistent with the public interest theory of regulation, which posits that regulation is implemented to improve some public good (reduce executive compensation). In addition, I construct an international comparative analysis of Say on Pay votes outlining the history of compensation, political trends, and corporate governance characteristics that led to the specific legislation in each jurisdiction in order to evaluate the impact of Say on Pay by type and find that binding votes lead to larger CEO compensation reduction.
