Who is Asking the Shareholders? Voting on Management Compensation in German Listed Firms – Evidence from the Annual Meeting Season 2010 (Wer fragt die Aktionäre? - Abstimmung über das Vorstandsvergütungssystem : Erfahrungen aus der HV-Saison 2010)

Since 2010 the German law allows for non-binding votes on management compensation by shareholders during the annual meeting. In a broad study covering all non-financial German Prime Standard firms we examine determinants affecting (i) the likelihood of a voting and (ii) the result of a vote. We find that the probability of a voting increases with a higher free float and strong media exposure. The approval rate increases with the voting power of blockholders. Moreover the introduction of a new remuneration system also leads to a higher approval rate. We argue that the company's administration is interested in legitimating the new remuneration system by allowing shareholder to vote and in avoiding reputational losses in case of non-voting