Abstract

http://ssrn.com/abstract=2079131
 
 

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Shareholder Activism and Political Spending


Vishal P. Baloria


University of Waterloo

Christine I. Wiedman


University of Waterloo

Kenneth J. Klassen


University of Waterloo - School of Accounting and Finance

November 2013

CAAA Annual Conference 2013

Abstract:     
We examine the determinants and consequences of shareholder activism around corporate political spending. Using a comprehensive sample of political spending-related shareholder proposals submitted between 2004 and 2012, we examine determinants of the targeting decision, factors affecting voting outcomes, and implementation rates for and market reaction to initiation of new political spending policies. Proposals calling for enhanced disclosure of spending information are most prevalent and garner the most votes relative to proposals for information on spending philosophy or those that aim to give shareholders a say on political spending. We find that 20% of the proposals are subsequently adopted, a rate that is very high relative to previous studies on shareholder proposals. Further, we find that while some activists, namely unions and pension funds, appear to target firms for private interests, voting patterns and market reaction to implementation decisions reflect a more sophisticated understanding of corporate political spending and an ability to filter out opportunism on the part of activists and/or management. Our findings contribute to the ongoing debate about the role of disclosure and shareholder voice in an era where firms face fewer restrictions in directing corporate funds towards political spending.

Number of Pages in PDF File: 53

Keywords: disclosure, political spending, shareholder proposals

JEL Classification: M41, G38, D72

working papers series


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Date posted: June 7, 2012 ; Last revised: November 19, 2013

Suggested Citation

Baloria, Vishal P. and Wiedman, Christine I. and Klassen, Kenneth J., Shareholder Activism and Political Spending (November 2013). CAAA Annual Conference 2013. Available at SSRN: http://ssrn.com/abstract=2079131 or http://dx.doi.org/10.2139/ssrn.2079131

Contact Information

Vishal P. Baloria (Contact Author)
University of Waterloo ( email )
200 University Avenue West
Waterloo, Ontario N2L 3G1
Canada
647-883-6469 (Phone)
Christine I. Wiedman
University of Waterloo ( email )
Waterloo, Ontario N2L 3G1
Canada
519-888-4567 x.3732 (Phone)
519-888-7562 (Fax)
Kenneth Klassen
University of Waterloo - School of Accounting and Finance ( email )
Waterloo, Ontario N2L 3G1
Canada
519-888-4567 x38550 (Phone)
519-888-7562 (Fax)
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