Cornell University
Library
Cornell UniversityLibrary

eCommons

Help
Log In(current)
DigitalCollections@ILR
ILR School
  1. Home
  2. ILR School
  3. Centers, Institutes, Programs
  4. Institute for Compensation Studies
  5. Shareholder Voting and Directors’ Remuneration Report Legislation: Say on Pay in the U.K. (CRI 2009-004)

Shareholder Voting and Directors’ Remuneration Report Legislation: Say on Pay in the U.K. (CRI 2009-004)

File(s)
cri_2009_004.pdf (351.56 KB)
Permanent Link(s)
https://hdl.handle.net/1813/73191
Collections
Institute for Compensation Studies
Author
Cavanagh, Martin J.
Sadler, Graham V.
Abstract

This paper investigates shareholder voting in the UK. The Directors’ Remuneration Report (DRR) Regulations of 2002 gave shareholders a mandatory non-binding vote on boardroom pay. First, using data on about 50,000 resolutions over the period 2002 to 2007 we find that less than 10% of shareholders abstain or vote against the mandated Directors’ Remuneration Report (DRR) resolution. Second, investors are more likely to vote against DRR resolutions compared to non-pay resolutions. Third, shareholders are more likely to vote against general executive pay resolutions, such as stock options, long term incentive plans and bonus resolutions compared to non-pay resolutions. Forth, firms with higher CEO pay attract greater voting dissent. Fifth, there is little evidence that CEO pay is lower in firms that previously experienced high levels of shareholder dissent. In addition, there is little evidence that the equity pay-mix, representing better owner-manager alignment, is greater in such firms. Currently, we find limited evidence that, on average, ‘say on pay’ materially alters the subsequent level and design of CEO compensation.

Date Issued
2009-08-18
Keywords
shareholder voting
•
United Kingdom
•
Britain
•
Directors’ Remuneration Report
•
DRR
•
CEO compensation
Type
preprint

Site Statistics | Help

About eCommons | Policies | Terms of use | Contact Us

copyright © 2002-2026 Cornell University Library | Privacy | Web Accessibility Assistance