Do Pension-Related Business Ties Influence Mutual Fund Proxy Voting? Evidence from Shareholder Proposals on Executive Compensation
40 Pages Posted: 3 Mar 2009 Last revised: 26 Oct 2015
Date Written: November 23, 2010
We examine the relation between mutual fund votes on shareholder executive compensation proposals and pension-related business ties between fund families and the firms. In unconditional tests, we find that fund families support management when they have pension ties to the firm. We find no relation when we stratify by fund family in conditional tests, which suggests that fund families with pension ties vote with management at both client and non-client firms. We confirm this result in an analysis of non-client firms. Overall, our results suggest that pension related business ties influence fund families to vote with management at all firms.
Keywords: Proxy Voting, Mutual Funds, Executive Compensation, Shareholder Rights
JEL Classification: G30, G23
Suggested Citation: Suggested Citation