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

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  • Yimeng Liang
  • Robyn Moroney
  • Michaela Rankin

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.

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  • Yimeng Liang & Robyn Moroney & Michaela Rankin, 2020. "Say‐on‐pay judgements: the two‐strikes rule and the pay‐performance link," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(S1), pages 943-970, April.
    • Handle: RePEc:bla:acctfi:v:60:y:2020:i:s1:p:943-970
    DOI: 10.1111/acfi.12391
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    1. Joura, Essam & Xiao, Qin & Ullah, Subhan, 2021. "The impact of Say-on-Pay votes on firms' strategic policies: Insights from the Anglo-Saxon economy," International Review of Financial Analysis, Elsevier, vol. 73(C).

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