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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | Say-on-Pay and Shareholder Value: The Tension between Agency and Hold-up |
| Organization Unit | |
| Authors |
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| Language |
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| Institution | University of Zurich |
| Series Name | Swiss Finance Institute Research Paper |
| Number | 11-12 |
| Number of Pages | 47 |
| Date | 2023 |
| Abstract Text | A set of policy experiments regarding binding say-on-pay votes in Switzerland suggests that shareholders may prefer to have limits set on their own power. The stock price reactions indicate a trade-off: On the one hand, binding votes on executive compensation amounts enhance the alignment of management interests with those of the shareholders, reducing agency costs. On the other hand, when shareholders have the power to (partially) set pay levels retrospectively, it may increase hold-up problems by distorting executives’ incentives to make extra-contractual, firm-specific investments. These findings have implications for the design of policy. |
| Free access at | DOI |
| Digital Object Identifier | 10.2139/ssrn.1793089 |
| Other Identification Number | merlin-id:9204 |
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