Continuous Evaluation of the Two-Strikes Rule: Long-Term and Spill-Over Effects

Abstract

This thesis evaluates the impact of the two-strikes rule on CEO remuneration and earnings management and the determinants of shareholder dissent. It finds that the rule effectively curbs remuneration increases and positively changes the remuneration structure. Also, engaging in earnings management activities is an unintended consequence of the rule's implementation. CEO remuneration and board characteristics moderate this relationship. Finally, shareholders have the ability to use their voting power appropriately.