Say on mobility:Do CEO outside opportunities affect shareholder say on pay?

Jean Canil; Sigitas Karpavičius; Shihe Li; Chia Feng Yu

doi:10.1016/j.frl.2022.102724

Say on mobility:Do CEO outside opportunities affect shareholder say on pay?

Jean Canil
, Sigitas Karpavičius
, Shihe Li
, Chia Feng Yu^*

^*Corresponding author for this work

University of Adelaide

Research output: Contribution to journal › Article › peer-review

Abstract

We investigate whether shareholders take into account CEO outside opportunities when casting their say on pay (SoP) votes. By employing the staggered rejection of the inevitable disclosure doctrine (IDD) by US states as an exogenous shock that increases key talent outflow risk, we find that IDD rejection moderates the well-documented positive relation between CEO pay and dissenting SoP votes. The effect is concentrated in firms with more able managers, higher firm efficiency, better operating performance, and greater uncertainty of a new manager's ability. Our results are the first to highlight talent retention as an important motive for affirmative SoP votes.

Original language	English
Article number	102724
Journal	Finance Research Letters
Volume	47
DOIs	https://doi.org/10.1016/j.frl.2022.102724
Publication status	Published - Jun 2022
Externally published	Yes

Keywords

Inevitable disclosure doctrine
Mobility
Say on pay votes
Talent retention

Access to Document

10.1016/j.frl.2022.102724

Cite this

@article{464b2bcbbf9641e0aa934386f396e578,

title = "Say on mobility:Do CEO outside opportunities affect shareholder say on pay?",

abstract = "We investigate whether shareholders take into account CEO outside opportunities when casting their say on pay (SoP) votes. By employing the staggered rejection of the inevitable disclosure doctrine (IDD) by US states as an exogenous shock that increases key talent outflow risk, we find that IDD rejection moderates the well-documented positive relation between CEO pay and dissenting SoP votes. The effect is concentrated in firms with more able managers, higher firm efficiency, better operating performance, and greater uncertainty of a new manager's ability. Our results are the first to highlight talent retention as an important motive for affirmative SoP votes.",

keywords = "Inevitable disclosure doctrine, Mobility, Say on pay votes, Talent retention",

author = "Jean Canil and Sigitas Karpavi{\v c}ius and Shihe Li and Yu, \{Chia Feng\}",

note = "Publisher Copyright: {\textcopyright} 2022",

year = "2022",

month = jun,

doi = "10.1016/j.frl.2022.102724",

language = "English",

volume = "47",

journal = "Finance Research Letters",