Discussion paper

DP10141 Say Pays! Shareholder Voice and Firm Performance

This paper estimates the effects of Say-on-Pay (SoP); a policy that increases shareholder "voice" by providing shareholders with a regular vote on executive pay. We apply a regression discontinuity design to the votes on shareholder-sponsored SoP proposals. Adopting SoP leads to large increases in market value (4%) and to improvements in longterm performance: profitability and labor productivity increase, while overheads and investment fall. In contrast, we find limited effects on pay levels and structure. This suggests that SoP serves as a regular vote of confidence on the CEO, that leads to higher efficiency and market value.


Cuñat, V, M Guadalupe and M Gine (eds) (2014), “DP10141 Say Pays! Shareholder Voice and Firm Performance”, CEPR Press Discussion Paper No. 10141. https://cepr.org/publications/dp10141