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Informed Voting

Author

Listed:
  • Meng Gao
  • Jiekun Huang

Abstract

Information production by shareholders is essential for proxy voting to produce efficient outcomes. We propose a stock return-based measure to capture informed voting. Our measure, the vote alpha, quantifies the extent to which a shareholder votes in the direction that the market perceives as value increasing. Using data on mutual funds’ proxy voting records, we find that the vote alpha exhibits persistence. Our main result shows that the voting pattern of high vote alpha funds positively predicts long-run abnormal stock returns following contentious votes, suggesting that these funds possess information about the shareholder value implication of contentious governance proposals.

Suggested Citation

  • Meng Gao & Jiekun Huang, 2025. "Informed Voting," The Review of Financial Studies, Society for Financial Studies, vol. 38(4), pages 1167-1210.
    • Handle: RePEc:oup:rfinst:v:38:y:2025:i:4:p:1167-1210.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhae038
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    More about this item

    Keywords

    G34; G23; G12; G14;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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