Say‐on‐pay judgements: the two‐strikes rule and the pay‐performance link. (13th July 2018)

• Record Type: Journal Article
• Authors: Liang, Yimeng; Moroney, Robyn; Rankin, Michaela
• Is Part Of: Accounting and finance. Volume 60(2020)Supplement 1
• Page Start: 943
• Page End: 970
• Publication Date: 2018-07-13
• Subjects: Executive remuneration -- Pay‐performance link -- Say‐on‐pay -- Two‐strikes rule; Accounting -- Periodicals; Finance -- Periodicals; 657.05
• DOI: 10.1111/acfi.12391
• Languages: English
• ISSNs: 0810-5391

Abstract

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.