Measurement Issues in the Proxy Access Debate

Abstract:     
Recent empirical data indicate that the Commission’s proxy access proposals reduce shareholder wealth and are inimical to the best interests of the shareholder community at large. Cross-sectional variation in stock price response data further suggest that the Commission should reject a ‘one-size-fits-all’ approach, and that an opt-in rule is less likely to destroy shareholder wealth than an opt-out rule. None of the studies cited by the Commission in its request for further comment support a competing conclusion. The studies cited by the Commission instead suggest a rational basis for the market’s concern that the proxy access process can be captured by a small number of institutions with idiosyncratic objectives that conflict with the best interests of the larger shareholder community.

Number of Pages in PDF File: 10

Keywords: Proxy access, Securities and Exchange Commission, corporate governance, directors, boards, shareholder rights, shareholder voting, event study, stock price

JEL Classification: D72, D73, D78, G3, G38, K22, K23

working papers series