This paper examines the impact of direct democracy on the executive branch. Direct democracy is a mixed blessing for the executive in theory: it weakens the legislature by cutting it out of the lawmaking process, but also allows new laws to avoid the governor's veto. Empirically, the constitutional initiative is associated with several changes in the organization of the executive branch, including term limits and lower salaries. By taking away the government's ability to set policy on some issues, the initiative permits citizens to target their votes more narrowly when the governor stands for re-election, providing stronger incentives for good performance. Some evidence from gubernatorial elections over suggests that voter sanctions are stronger when the initiative is available.