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- Title
Shareholder say on pay and CEO compensation: three strikes and the board is out.
- Authors
Grosse, Matthew; Kean, Stephen; Scott, Tom; Smith, Tom
- Abstract
From 2011 in Australia, if over 25% of shareholders vote against a non-binding remuneration resolution, firms are awarded a 'strike'. We examine 237 firms that receive a strike relative to matched firms, and find no association with any measure of CEO pay. However, we do find that strike firms have higher book-to-market and leverage ratios, suggesting that the remuneration vote is not used to target excessive pay. We also find that firms respond to a strike by decreasing the discretionary bonus component of CEO pay by 57.10% more than non-strike firms and increasing their remuneration disclosure by 10.95%.
- Subjects
EXECUTIVE compensation; STOCKHOLDER attitudes; CHIEF executive officers; AUSTRALIAN Stock Exchange Ltd.; BOOK-to-market ratio
- Publication
Accounting & Finance, 2017, Vol 57, Issue 3, p701
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/acfi.12176