IDEAS home Printed from https://ideas.repec.org/p/ecl/stabus/2077.html
   My bibliography  Save this paper

Proxy Advisory Firms and Stock Option Exchanges: The Case of Institutional Shareholder Services

Author

Listed:
  • Larcker, David F.

    (Stanford University)

  • McCall, Allan L.

    (Stanford University)

  • Ormazabal, Gaizka

    (Stanford University)

Abstract

This paper examines the relationship between firm performance and the recommendations provided by Institutional Shareholder Services (ISS), the largest proxy advisory firm in the United States, regarding shareholder votes in stock option exchange programs. Using a comprehensive sample of stock option exchanges announced between 2004 and 2009, we find that firms that adopt exchanges that follow the restrictive ISS policies exhibit statistically lower market reaction at the announcement of this transaction, lower operating performance, and higher executive turnover. These results are consistent with the conclusion that ISS recommendations regarding stock option exchanges are not value increasing for shareholders.

Suggested Citation

  • Larcker, David F. & McCall, Allan L. & Ormazabal, Gaizka, 2011. "Proxy Advisory Firms and Stock Option Exchanges: The Case of Institutional Shareholder Services," Research Papers 2077, Stanford University, Graduate School of Business.
    • Handle: RePEc:ecl:stabus:2077
    as

    Download full text from publisher

    File URL: http://gsbapps.stanford.edu/researchpapers/library/RP2077&100.pdf
    Download Restriction: no
    ---><---

    More about this item

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecl:stabus:2077. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/gsstaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.