| Summary: | Abstract
The debate about the say on pay initiative has lasted for a long time since the United Kingdom enacted it in 2002. This empirical study aims to investigate the effect of the say on pay and whether it is effective in UK from a new perspective on the say on pay law, which was issued by the UK in 2013, based on UK companies’ data sample from 2011 to 2015. The research uses the latest data in 2018 firstly and finds that the shareholder activism and CEO pay has a significantly positive relationship. However, there is no strong evidence that the say on pay law could curb the CEO compensation. Furthermore, this paper documents a remarkably negative link between the passage of the law and firm performance in the large companies from the five-year sample, suggesting that this law might be not suitable for big firms.
Keywords: Shareholder activism, say on pay, CEO pay, firm performance, corporate governance
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