Say-on-Pay voting dispersion in listed family and non-family firms: A panel data analysis

Abstract

The study of Say-on-Pay (SOP) – a shareholder vote on executive compensation – is a key topic in the corporate governance field, despite which its influence in the context of family firms has not been studied until now. In response to this need, this paper pursues a twofold objective: first, to analyze differences in shareholder voting behavior between family and non-family firms; second, to explore the impact of increasing family ownership on voting dispersion among family firms, testing the related moderating effects of family involvement in management and governance on this relationship. Focusing on a sample of large UK listed companies from 2007–2017, our results show that the distinctive features of family firms lead to more concentrated voting positions regarding pay packages compared to non-family firms, with this voting concentration tending to be higher as family ownership increases. Moreover, while this relationship intensifies when the family is involved in management, we find partial support in the case of family involvement in governance.