50 Pages Posted: 3 Aug 2008 Last revised: 17 Jan 2012
Date Written: Jan 15, 2012
Mutual funds whose managers are in the same educational network as the firm’s CEO are more likely to vote against shareholder-initiated proposals to limit executive compensation than out-of-network funds. This voting propensity is stronger when voting among the funds in a family is not unanimous. Furthermore, CEOs of firms with relatively high levels of educationally connected mutual fund ownership have higher levels of compensation than their unconnected counterparts. This aspect of executive compensation is related to both the abnormal trading performance of the connected investors in the firm and the perceived quality of firm management by the connected investors.
Keywords: executive compensation, social connections, share voting
JEL Classification: G34
Suggested Citation: Suggested Citation
Butler, Alexander W. and Gurun, Umit G., Educational Networks, Mutual Fund Voting Patterns, and CEO Compensation (Jan 15, 2012). Available at SSRN: https://ssrn.com/abstract=1195202 or http://dx.doi.org/10.2139/ssrn.1195202