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The impact of Say-on-Pay votes on firms' strategic policies: Insights from the Anglo-Saxon economy

Joura, Essam; Xiao, Qin; Ullah, Subhan


Essam Joura

Subhan Ullah


This study examines evidences of executive reactions to say-on-pay (SOP) votes in terms of strategic policies which could affect firms' long-run growth and eventual survival. We employed an unbalanced panel data from 1932 firms taken from four countries in the Anglo-Saxon economy, covering time periods when different forms of SOP were implemented in these countries. Using Limited Information Maximum Likelihood (LIML) estimator to gauge the simultaneous determination of SOP votes and firm strategic policies, we find that, in line with shareholders preferences, US firms had increased capital expenditure ratio; Australian and US firms had reduced reliance on debt financing; US managers had shifted focus on current rather than long-term profit, but evidences emerged from other countries are unclear. Corroborations also suggest that excess liquidity was shunned by Canadian shareholders, but the reactions of their company executives were overly disproportionate. UK firm policies did not appear to have been affected by SOP, and vice versa. Overall, the varying effects of SOP votes on firms' strategic policies might be ascribed to either the adoption of a specific SOP practice or the effectiveness of the board.


Joura, E., Xiao, Q., & Ullah, S. (2021). The impact of Say-on-Pay votes on firms' strategic policies: Insights from the Anglo-Saxon economy. International review of financial analysis, 73, Article 101606.

Journal Article Type Article
Acceptance Date Oct 13, 2020
Online Publication Date Oct 18, 2020
Publication Date Jan 1, 2021
Deposit Date Dec 30, 2020
Publicly Available Date Oct 27, 2022
Journal International Review of Financial Analysis
Print ISSN 1057-5219
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 73
Article Number 101606
Keywords Say-on-pay; Investment; Financing; Profitability; Liquidity
Public URL
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