The Shareholder Wealth Effects of Calpers' Activism

Posted: 3 Sep 1998

See all articles by Claire E. Crutchley

Claire E. Crutchley

Auburn University

Carl D. Hudson

Federal Reserve Banks - Federal Reserve Bank of Atlanta

Marlin R.H. Jensen

Auburn University

Abstract

In the past decade, institutional investors have become more active in monitoring management and voting the shares they control. The California Public Employees' Retirement System (CalPERS) was a leader in this wave of activism. This study investigates the long-term returns an investor with public information could earn by buying a portfolio of firms targeted by CalPERS and whether the success of CalPERS' activism depends on the aggressiveness of the targeting. The evidence supports the idea that visible and aggressive activism leads to substantial increases in shareholder wealth while a quieter activism does not.

JEL Classification: G12, G14

Suggested Citation

Crutchley, Claire E. and Hudson, Carl D. and Jensen, Marlin R.H., The Shareholder Wealth Effects of Calpers' Activism. Financial Services Review, Vol. 7 No 1. Available at SSRN: https://ssrn.com/abstract=121049

Claire E. Crutchley (Contact Author)

Auburn University ( email )

415 West Magnolia Avenue
303 Lowder Business Building
Auburn, AL 36849
United States
334-844-3002 (Phone)
334-844-4960 (Fax)

Carl D. Hudson

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States

Marlin R.H. Jensen

Auburn University ( email )

415 West Magnolia Avenue
Auburn, AL 36849
United States
334-844-3006 (Phone)

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