PAY-PERFORMANCE SENSITIVITY AND SAY-ON-PAY ADVISORY VOTE IN THE UNITED STATES
Keywords:
Executive Compensation, Pay-Performance Sensitivity, Say-on-Pay Advisory VoteAbstract
Say-on-Pay Advisory vote in the United States requires shareholders to play an essential role in assessing executive pay packages and make decisions regarding the approval or disapproval of those pay packages by assessing through the indicator of pay-performance sensitivity (PPS). The pay package should be approved when the value of PPS is high and should be disapproved when the value of PPS is low or negative. However, several studies argue that too much PPS could lead to risk-averse executive decisions, which tend to negatively influence on firm performance in long run. This research aims to study whether shareholder disapproval votes on the executive pay package of S&P 1500 firms are associated with higher PPS. The research model shows the relationship between firm performance and executive pay, indicating PPS, in which the dummy variables, representing the sampled firms with significant increases of disapproval votes were added. Multilevel model analysis was employed in examining the relationship as to control for both fixed and random effects as well as the control variables, which were added as to control other important influences on executive pay. The findings show that the alternative argument with regard to too much pay-performance sensitivity has been incorporated in the Say-on-Pay votes, which can extend the strand of literature related to PPS and Say-on-Pay voting decisions and make a suggestion for shareholder in assessing executive pay packages.
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วารสารบริหารธุรกิจศรีนครินทรวิโรฒ ยินดีรับบทความวิจัยและบทความทางวิชาการด้านบริหารธุรกิจ เพื่อพิจารณาตีพิมพ์เผยแพร่ในวารสาร ซึ่งทัศนะและข้อคิดเห็นใดๆ ในวารสารฯ ถือเป็นความคิดเห็นและความรับผิดชอบโดยตรงของผู้เขียน มิใช่เป็นความคิดเห็นและความรับผิดชอบใดๆ ของคณะบริหารธุรกิจเพื่อสังคม มหาวิทยาลัยศรีนครินทรวิโรฒ ผู้ประสงค์จะนำบทความหรือบทวิจารณ์ใดๆ ไปเผยแพร่ จะต้องได้รับการอนุญาตจากวารสารเป็นลายลักษณ์อักษร ลิขสิทธิ์บทความที่เผยแพร่ทั้งหมดเป็นของวารสารบริหารธุรกิจศรีนครินทรวิโรฒ
