August 2, 2017
Global Perspective: Does Say-on-Pay Increase Corporate Value?
– Liz Dunshee
According to this recent University of Georgia study, corporate valuations tend to rise after say-on-pay practices are implemented. The researchers looked at 17,000 companies in countries with – and without – say-on-pay laws. Here are a few other findings, as described by the press release:
– When say-on-pay is implemented, the decline in CEO pay is more severe at companies with poor performance. Those in the bottom quartile saw CEO salaries fall by 9.1 percent.
– Excess pay decreased following say-on-pay – especially in firms where CEOs had more power.
– CEO pay is increasing at a lower rate in countries with say-on-pay laws – and is more sensitive to company performance.