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on Collective Decision-Making |
| By: | Maria Cotofan; Karlygash Kuralbayeva; Konstantinos Matakos |
| Abstract: | The effects of climate change have become far more noticeable in recent years, with abnormally high temperatures recorded across the world. Maria Cotofan, Karlygash Kuralbayeva and Konstantinos Matakos examine how spikes in temperature influence political behaviour and how age groups respond differently. |
| Keywords: | preference formation, environmental policies, policy support, voting |
| Date: | 2024–06–20 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepcnp:684 |
| By: | Xiaohui Li (The School of Accounting and Finance, Hong Kong Polytechnic University); Yao Shen (Zicklin School of Business, c, City Univeristy of New York); Jing Xie (Department of Finance and Business Economics, Faculty of Business Administration, University of Macau) |
| Abstract: | We find that investors are more negative towards firm management in proxy voting when CEOs have higher job mobility. Specifically, we document an increased dissenting vote against management-sponsored compensation proposals after an exogenous positive shock to CEO job mobility. Consistent with the rent extraction hypothesis, the effect is more pronounced for firms with poor past performance, overpaid CEOs, and weaker corporate governance. Proxy advisors recommend more against firm management after the shock, casting a larger influence on voting outcomes. Moreover, our investor level analysis suggests that larger investors care less about job mobility in their voting. |
| Keywords: | Proxy Voting; Executive Compensation; Labor Market; Proxy Advisor; Mutual Funds |
| JEL: | G30 G34 J33 M12 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:boa:wpaper:202412 |
| By: | C.S. Agnes Cheng; Iftekhar Hasan; Feng Tang; Jing Xie (Department of Finance and Business Economics, Faculty of Business Administration, University of Macau) |
| Abstract: | Our paper shows that when a compensation peer firm experiences a significant failure in its say on pay (SOP) voting, the focal firm’s stock price is adversely affected, and as a result, the CEO’s pay is reduced in the subsequent period. This pay-reduction effect is amplified when the board of directors is more powerful relative to the CEO, when proxy advisors have expressed concerns about CEO pay, and when the quality of the hired compensation consultant is lower. Moreover, directors who react to the price drop and cut the CEO’s pay receive higher voting support from investors in future director elections. Our findings demonstrate the existence of a market feedback effect for directors of the focal firm triggered by their peers’ SOP voting failure. These findings have implications for regulators and offer insights into the efficacy of SOP voting rules. |
| Keywords: | Feedback Effect; Learning from Prices; Say-on-pay Vote; Executive Compensation; Spillover Effect; Shareholder Activism |
| JEL: | G34 M12 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:boa:wpaper:202408 |