Working Paper No. 76 (February 2014)
JEL Classifications: G34, G38, J33, K22, M52

Massimo Belcredi (
Università Cattolica del Sacro Cuore, Milan, ECGI

Stefano Bozzi (
Università Cattolica del Sacro Cuore, Milan

Angela Ciavarella (
CONSOB, Research Department

Valerio Novembre (
CONSOB, Research Department


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We investigate say-on-pay (SOP) voting outcomes in a country (Italy) where ownership structure is concentrated by regressing shareholder dissent on a comprehensive set of independent variables (spanning from remuneration structure and disclosure to corporate governance), coming from the Italian securities and exchange commission (CONSOB) and the listed companies’ industry association (Assonime-Emittenti Titoli) databases. Our main results may be summarized as follows: a) shareholder dissent in Italy is smaller, but still comparable with that found in the UK and the US, where ownership is disperse; b) dissent is negatively correlated with the equity stake held by the largest shareholder; we interpret this evidence as consistent with better monitoring and lower agency costs; c) dissent is, at best, only weakly related with company performance; however, it is positively correlated with CEO remuneration and negatively correlated with the level of disclosure, especially on the variable components of CEO pay; d) dissent is affected by investor activism at the company level, as proxied by the turnout of institutional investors at the AGM and by minority directors (a peculiar feature of Italian CG regulation) sitting on the board of target companies; e) finally, dissent is higher where shareholders’ SOP vote is non-binding, suggesting that the non-binding nature of the SOP vote may not reduce its effectiveness.

We wish to thank Magda Bianco, Nadia Linciano e Giovanni Siciliano for very helpful comments on a previous draft, though the responsibility for any mistakes and for the opinions expressed remains our own. We also thank Federica Apruzzese and Eugenia Della Libera for their excellent research assistantship. The ideas and positions in the paper are personal views of the authors and cannot be attributable to Consob.

ISSN 2281-3519