The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Tue, 21 Jul 2026 13:53:10 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png The Influence of Proxy Advisory Firm Voting Recommendations – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 The Influence of Proxy Advisory Firm Voting Recommendations https://corpgov.law.harvard.edu/2012/04/08/the-influence-of-proxy-advisory-firm-voting-recommendations/?utm_source=rss&utm_medium=rss&utm_campaign=the-influence-of-proxy-advisory-firm-voting-recommendations https://corpgov.law.harvard.edu/2012/04/08/the-influence-of-proxy-advisory-firm-voting-recommendations/#comments Sun, 08 Apr 2012 11:43:51 +0000 http://blogs.law.harvard.edu/corpgov/?p=27313?d=20150113150059EST Posted by Matteo Tonello, The Conference Board, on Sunday, April 8, 2012
Editor's Note:

Matteo Tonello is Director of Corporate Governance for the Conference Board, Inc. This post is based on a Conference Board Director Note by David F. Larcker, Allan L. McCall, and Brian Tayan; the full publication, including charts, survey results, and footnotes, is available here.

This report examines current evidence regarding the influence of third-party proxy advisory firms’ voting recommendations on shareholder proposal voting outcomes, particularly say-on-pay votes. It also presents the findings of a study, conducted by The Conference Board, NASDAQ, and the Rock Center for Corporate Governance at Stanford University, which shows that proxy advisory firms have a substantial impact on the design of executive compensation programs. However, the impact of those firms on governance quality and shareholder value is still unknown.

A growing body of evidence demonstrates the influential role that third-party proxy advisory firms play in affecting the voting outcome of proposals made to shareholders in the annual proxy, particularly say-on-pay votes, which became mandatory for most public companies in 2011. There is less evidence, however, to establish the extent to which companies respond to this influence by changing the size and structure of executive compensation plans to conform to proxy advisor voting polices. A recent study conducted by The Conference Board, NASDAQ, and the Rock Center for Corporate Governance at Stanford University found that proxy advisory firms have a substantial impact on the design of executive compensation programs.

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