Does Say-on-Pay Matter? Evidence from Say-on-Pay Proposals in the United States


  • We thank two anonymous reviewers, seminar participants at Bentley University, Morgan State University, The University of Texas at San Antonio, and the Federal Reserve Bank at Chicago. We thank John Wald for helpful comments. We also acknowledge helpful research assistance on portions of this article by Kevin Gao and Timothy Krause. All errors are our own.

Corresponding author: Bentley University, 175 Forest Street, Waltham, MA 02458; Phone: (781) 891-2941; Fax: (781) 788-6456; E-mail:


We investigate the effect of say-on-pay (SOP) proposals on changes in executive and director compensation. Relative to non-SOP firms, SOP firms’ total compensation to CEOs does not significantly change after the proposal. However, the mix of compensation does change—companies move away from using cash compensation toward more incentive compensation, offsetting the reduction in bonus. Further, the mix of compensation of non-CEO executives changes similarly to that of CEOs. Compensation to directors of SOP firms increases less than non-SOP firms. Firms whose CEOs are well compensated, especially with cash-based compensation, are most likely to receive a proposal.