TY - JOUR
T1 - Say on mobility:Do CEO outside opportunities affect shareholder say on pay?
AU - Canil, Jean
AU - Karpavičius, Sigitas
AU - Li, Shihe
AU - Yu, Chia Feng
N1 - Publisher Copyright:
© 2022
PY - 2022/6
Y1 - 2022/6
N2 - 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.
AB - 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.
KW - Inevitable disclosure doctrine
KW - Mobility
KW - Say on pay votes
KW - Talent retention
UR - http://www.scopus.com/inward/record.url?scp=85124657030&partnerID=8YFLogxK
U2 - 10.1016/j.frl.2022.102724
DO - 10.1016/j.frl.2022.102724
M3 - Article
AN - SCOPUS:85124657030
SN - 1544-6123
VL - 47
JO - Finance Research Letters
JF - Finance Research Letters
M1 - 102724
ER -