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What Are the Shareholder Value Implications of Non-Voted Shareholder Proposals?

Author

Listed:
  • Maxime Couvert

    (Ecole Polytechnique Fédérale de Lausanne; Swiss Finance Institute)

Abstract

Managerial resistance precludes half of shareholder-initiated proposals from reaching the ballot stage. I construct a novel dataset of excluded and withdrawn proposals from the Securities and Exchange Commission's responses to managers' exclusion requests. An examination of announcement returns to the exclusion and withdrawal decisions reveals that non-voted proposals have a value-destroying nature. Special interest investors pursuing self-serving agendas and retail investors advocating for one-size-fits-all reforms explain the harmful character of non-voted proposals. I correct for the selection bias induced by managerial resistance and show that focusing only on voted proposals overstates the shareholder proposals-driven value creation.

Suggested Citation

  • Maxime Couvert, 2018. "What Are the Shareholder Value Implications of Non-Voted Shareholder Proposals?," Swiss Finance Institute Research Paper Series 18-79, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp1879
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    More about this item

    Keywords

    Corporate Governance; Corporate Social Responsibility; Shareholder Proposals; Shareholder Empowerment; Institutional Investors;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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