Abstract
AbstractSay‐on‐pay empowers shareholders by mandating advisory voting on executive compensation during annual meetings. Extant literature maintains that the degree of effectiveness of SOP remains unclear. Using shareholder voting data from 2011 to 2015, we estimate regression models, and from our analysis, we find improved subsequent firm performance for higher SOP voting dissent observations. Furthermore, we find a positive association between SOP dissent vote and risk‐taking. The findings suggest that managers take seriously the negative outcomes of SOP, especially the higher SOP voting dissent. This study contributes to the growing research on SOP votes, as it highlights some impact of SOP voting.
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