Say-on-pay judgements: the two-strikes rule and the pay-performance link

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Abstract

We undertake an experiment to explore shareholder voting behaviour when the pay-performance link is weak or strong; and when there has (has not) been a first strike in the preceding year. We find shareholders are more supportive of a remuneration package evidencing a strong pay-performance link than a weak link. Further, shareholders are less supportive of a remuneration package when there has been a first strike in the preceding year than when there has not been a first strike. Importantly, we find that a first strike reduces the effect of the pay-performance link on voting intentions. Accounting and Finance

Original languageEnglish
Pages (from-to)943-970
Number of pages28
JournalAccounting and Finance
Volume60
Issue numberS1
DOIs
Publication statusPublished - Apr 2020

Keywords

  • Executive remuneration
  • Pay-performance link
  • Say-on-pay
  • Two-strikes rule

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