Say Pays! Shareholder Voice and Firm Performance

Say Pays! Shareholder Voice and Firm Performance

Vicente Cuñat, Mireia Giné, MARIA GUADALUPE

Series number :

Serial Number: 

Date posted :

January 01 2012

Last revised :

July 31 2013
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  • Say-on-Pay • 
  • Shareholder Voice • 
  • executive compensation • 
  • FirmPerformance • 
  • governance

This paper estimates the effects of Say-on-Pay (SoP); a policy that increases shareholder ?voice? by providing shareholders with a regular vote on executive pay. We apply a regression discontinuity design to the votes on shareholder-sponsored SoP proposals.

Adopting SoP leads to large increases in market value (4.6%) and to improvements in long-term performance: profitability and labor productivity increase, while overheads and investment fall. In contrast, we find limited effects on pay levels and structure. This suggests that SoP operates as a regular vote of confidence, increasing efficiency and market value.


Real name:
Research Member
Department of Finance, London School of Economics
Real name: