The Impact of Investor Horizon on Say‐On‐Pay Voting

23 Pages Posted: 21 Oct 2016

See all articles by Konstantinos Stathopoulos

Konstantinos Stathopoulos

The University of Manchester - Alliance Manchester Business School

Georgios Voulgaris

University of Manchester - Alliance Manchester Business School

Multiple version iconThere are 2 versions of this paper

Date Written: October 2016

Abstract

Shareholder investment horizons have a significant impact on say‐on‐pay voting patterns. Short‐term investors are more likely to avoid expressing opinion on executive pay proposals by casting an abstaining vote. They vote against board proposals on pay only in cases where the CEO already receives excessive pay levels. In contrast, long‐term investors typically cast favourable votes. According to our findings, this is due to effective monitoring rather than collusion with the management. Overall, investor heterogeneity in terms of investment horizons helps explain say‐on‐pay voting, in particular the low levels of say‐on‐pay dissent, which have recently raised questions over the efficiency of this corporate governance mechanism.

Suggested Citation

Stathopoulos, Konstantinos and Voulgaris, Georgios, The Impact of Investor Horizon on Say‐On‐Pay Voting (October 2016). British Journal of Management, Vol. 27, Issue 4, pp. 796-818, 2016, Available at SSRN: https://ssrn.com/abstract=2856742 or http://dx.doi.org/10.1111/1467-8551.12172

Konstantinos Stathopoulos (Contact Author)

The University of Manchester - Alliance Manchester Business School ( email )

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Georgios Voulgaris

University of Manchester - Alliance Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

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