Does obfuscating excessive CEO pay work? The influence of remuneration report readability on say-on-pay votes
研究英国上市公司发现，当CEO薪酬过高时，降低薪酬报告可读性可减少股东反对票，但机构持股比例高时效果减弱甚至适得其反。
This paper assesses whether reducing ‘readability’ is an effective obfuscation strategy for influencing the level of shareholder say-on-pay voting dissent in firms with excessive CEO pay. Based on a sample of UK-listed firms, our results indicate that in cases of excessive CEO pay, a less readable remuneration report is associated with reduced say-on-pay voting dissent. However, the effect of the obfuscation strategy diminishes as institutional ownership increases. Using obscurely written remuneration reports may even backfire (i.e. associated with increased voting dissent) when a firm’s majority shares are held by institutional investors. Our results are robust to controlling for compensation contract complexity as well as other alternative explanations. The results are also robust to various controls for endogeneity including a two-stage instrumental variable approach and propensity-score matching. Our findings offer regulatory implications that regulators could minimize the use of ‘obfuscation’ in pay-related disclosures by prescribing how information is to be presented.