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础耻迟丑辞谤蝉:听贵辞谤迟颈苍,听厂迟别惫别;听厂耻产谤补尘补苍颈补尘,听颁丑补苍诲谤补;听奥补苍驳,听齿耻蹿谤补苍办;听窜丑补苍驳,听厂补苍箩颈补苍

笔耻产濒颈肠补迟颈辞苍:听Journal of Contemporary Accounting and Economics

Abstract:

We investigate an emerging pay-performance activism under a natural setting of performance-focused shareholder proposals rule (PSPs) (Rule 14a-8) established by the Securities and Exchange Commission (SEC) for top management compensation. We find that: (1) PSP sponsors successfully identify firms that suffer from a misalignment of managers and shareholders' interests; (2) CEOs' pay-for-performance sensitivity increases in the post-proposal period; and (3) shareholders benefit through positive stock returns as related to proposal filing dates; while (4) bondholders suffer significant negative returns and even more so for high-leverage firms. Our additional analyses suggest that perceived risk increase is the main driver of observed negative abnormal bond returns. However, we fail to find similar results for shareholder proposals not focused on performance (NPSPs). Collectively, our results indicate that shareholders benefit from this pay-performance activism through PSPs (but not NPSPs), but potentially at the expense of bondholders.