Industry Competition, Ownership Structure and Shareholder Activism

46 Pages Posted: 2 Jul 2010 Last revised: 20 Sep 2010

See all articles by Rob Bauer

Rob Bauer

Maastricht University

Robin Braun

Maastricht University

Michael Viehs

Oxford University Smith School of Enterprise and the Environment; European Centre for Corporate Engagement (ECCE)

Date Written: September 16, 2010

Abstract

We study shareholder activism through proxy proposals in the United States from 1997-2006. We investigate the determinants for being targeted and the corresponding voting results. By using a distinctive sample that also includes withdrawn and omitted proposals, we circumvent a selection bias towards those proposals that actually go to a vote. We hypothesize that a lack of industry competition in combination with higher managerial entrenchment increases the likelihood of being targeted. Our empirical results support this hypothesis. Concerning voting outcomes, we find that insiders’ equity holdings have a significant and negative correlation. Hence, managers actively vote against shareholder proposals.

Keywords: Shareholder proposals, shareholder activism, industry competition, relative governance, managerial entrenchment, shareholder base

JEL Classification: G32, G34

Suggested Citation

Bauer, Rob and Braun, Robin and Viehs, Michael, Industry Competition, Ownership Structure and Shareholder Activism (September 16, 2010). Available at SSRN: https://ssrn.com/abstract=1633536 or http://dx.doi.org/10.2139/ssrn.1633536

Rob Bauer

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 3883871 (Phone)

Robin Braun (Contact Author)

Maastricht University ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 (0) 43 388 3687 (Phone)
+31 (0) 43 388 4875 (Fax)

HOME PAGE: http://www.fdewb.unimaas.nl/finance/faculty/braun

Michael Viehs

Oxford University Smith School of Enterprise and the Environment ( email )

South Parks Road
Oxford, OX1 3QY
United Kingdom
+44-1865-614938 (Phone)

European Centre for Corporate Engagement (ECCE) ( email )

Tongersestraat 53
Maastricht, 6211LM
Netherlands

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