Labor Unions as Shareholder Activists: Champions or Detractors?
Andrew K. Prevost
Ohio University - Department of Finance
Ramesh P. Rao
Oklahoma State University - Stillwater - Spears School of Business - Department of Finance
Melissa A. Williams
University of Houston, Clear Lake - School of Business and Public Administration
February 5, 2009
This paper examines the impact of labor union shareholder activism through the submission of shareholder proposals during 1988-2002. We examine the effect of labor union sponsored shareholder proposals on announcement period returns, on the corporate governance environment of the firm including shareholder rights, board composition, and CEO compensation, and on long run shareholder wealth. We find that the efficacy of activism is related to union presence at targeted firms and shareholder support for proposals. Our findings, hitherto not reported elsewhere, contribute to the shareholder activism literature by implying that labor unions may be unique in their ability to spur such changes relative to other shareholder proponents.
Number of Pages in PDF File: 31
Keywords: labor unions, shareholder proposals, shareholder activism
JEL Classification: G30
Date posted: April 14, 2008 ; Last revised: February 6, 2009