Say-on-Pay: an empirical investigation of voting likelihood and voting behavior in German Prime Standard companies

Abstract

The following article investigates the usage of non-binding Say-on-Pay (SOP) voting in German Prime Standard companies for the general meeting seasons 2010–2013. Our overall sample contains 290 companies. We find that the number of companies which conduct a vote and the relative approval rate among these companies continuously decrease. We examine the influence of company characteristics and performance measures on a SOP voting for the considered companies, and compare the results to findings of prior empirical studies. The factors determining the SOP voting likelihood are identified through a quantitative analysis. Using a logistic regression, our study shows that the likelihood for the occurrence of a vote increases with company size. In addition, we also identify potential multi-periodic patterns in SOP votes indicating that initial voting cycles might have been set by companies exceeding the 4 year span of our study.