Does shareholder-sponsored corporate governance proposal matter? The case of executive compensation | Posted on:2009-12-15 | Degree:Ph.D | Type:Dissertation | University:The University of Texas at Arlington | Candidate:Wang, Xu | Full Text:PDF | GTID:1449390002991770 | Subject:Business Administration | Abstract/Summary: | | This study investigates the role of shareholder-sponsored corporate governance proposals in monitoring top management compensation. In particular, I test whether theories of agency costs, corporate governance, and optimal contracting can explain why shareholders submit executive-pay proposals, and examine the economic consequences of these shareholder proposals for the targeted firms.;I find that firms are more likely to receive performance-oriented shareholder executive-pay proposals when the firms have higher agency costs, stronger shareholder rights, or higher unexpected executive compensation. Shareholder executive-pay proposals gain more voting support from shareholders if the proposals are performance-oriented (than non-performance-oriented), sponsored by pension or union funds (than individual or religious groups and other institutions). In one year subsequent to the year of receiving performance-oriented shareholder executive-pay proposals, proposal firms' executive pay-performance sensitivities in stock option grants, and cash and total compensation increase more than control firms'. In addition, CEOs' compensation structures shift more toward equity-based for the proposal firms than for control firms in the year subsequent to the proposal year. | Keywords/Search Tags: | Proposal, Corporate governance, Shareholder, Compensation, Firms, Year | | Related items |
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