Shareholder Activism and Political Spending
Vishal P. Baloria
Kenneth J. Klassen
University of Waterloo - School of Accounting and Finance
Christine I. Wiedman
University of Waterloo
May 15, 2014
CAAA Annual Conference 2013
We examine the determinants and consequences of shareholder activism around corporate political spending using a sample of political spending shareholder proposals from 2004 and 2012. Proposals calling for enhanced disclosure of spending information are most prevalent and garner the most votes relative to those calling for information on spending philosophy or say on political spending. We find that 20% of the proposals are subsequently adopted, a rate that is high relative to previous studies. Further, we find that while 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 political spending and an ability to filter out opportunism on the part of activists/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: 57
Keywords: disclosure, political spending, shareholder proposals
JEL Classification: M41, G38, D72
Date posted: June 7, 2012 ; Last revised: August 13, 2014
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