1. Say-on-Pay Laws Increase Company Valuations, Study Finds

    Say-on-Pay Laws Increase  Company Valuations, Study Finds

    When shareholders have a say on executive pay, CEO salaries decline and company valuations rise, according to a University of Georgia study. By analyzing financial data from more than 17,000 publicly traded companies in countries that have passed say-on-pay laws and countries that haven't, researchers found such laws tie CEO pay more closely to their company's performance and increase compensation equality among top managers. "Eleven developed countries passed these laws between 2003 and 2013, so that gave us a natural laboratory where we could ...

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  2. Quotes

    1. Eleven developed countries passed these laws between 2003 and 2013, so that gave us a natural laboratory where we could see what effect these laws actually had.
    2. We were surprised to find that after the laws were passed, there was still an increase in CEO pay. Critics argue that the pay increase means the laws are ineffective. That observation is correct, but the interpretation is wrong.
    3. There are times when you want to pay a CEO excessively, such as when he or she is doing a really great job and you don't want them to leave.
    4. It turned out that there was not much difference between binding and non-binding laws. In the U.S., for instance, Dodd-Frank is non-binding but it still shows all of these effects.
    5. We looked at pay dispersion between the CEO and the other senior executives like the CFO and COO. There is sometimes a big pay discrepancy there because companies want to set up tournament incentives so that everyone keeps working hard to get the top spot.
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