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We examine the influence of proxy advisors on firms’ shareholder engagement behavior. Our analyses exploit a quasi-natural experiment using Say-On-Pay voting outcomes near a threshold that triggers a review of engagement activities by Institutional Shareholder Services (ISS). Firms receiving...
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amendments, "Just Vote No" campaigns, and other activist efforts. As institutional and other shareholders have attempted to …
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. 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 … performance (NPSPs). Collectively, our results indicate that shareholders benefit from this pay-performance activism through PSPs …
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