Corporate governance, CEO turnover and say on pay votes

Abstract

Purpose

The purpose of this study is to investigate how compensation committee structure or characteristic impacts say on pay (SOP) voting dissent and the impact of SOP dissent on chief executive officer (CEO) turnover.

Design/methodology/approach

The authors use corporate governance and SOP data to test the relationships amongst variables. Additional analysis is performed using one-to-one propensity-score matched samples.

Findings

The authors find that firm-years with at least a female member present on the compensation committee are associated with lower SOP dissent. The authors find mixed results of the impact of SOP dissent on CEO turnover.

Practical implications

This paper suggests that diversity on the compensation committee, particularly the presence of at least a female member on the committee, serves as an important determinant of SOP voting outcome in the USA. The paper provides policymakers and practitioners with insights into factors influencing SOP voting outcomes and implications of SOP dissent for firms.

Originality/value

The findings of this paper contribute to the corporate governance literature by enhancing the understanding of the role of the compensation committee as it relates to SOP dissent and effect of SOP dissent on CEO turnover.

Citation

Omar, A., Tang, A.P. and Cong, Y. (2021), "Corporate governance, CEO turnover and say on pay votes", Accounting Research Journal, Vol. 34 No. 6, pp. 580-596. https://doi.org/10.1108/ARJ-11-2019-0207