'Low Cost' Shareholder Activism: A Review of the Evidence

RESEARCH HANDBOOK ON THE ECONOMICS OF CORPORATE LAW, Claire Hill & Brett McDonnell, eds., Elgar Publishers, Forthcoming

42 Pages Posted: 2 Dec 2010

See all articles by Fabrizio Ferri

Fabrizio Ferri

University of Miami - Miami Business School

Date Written: December 1, 2010

Abstract

In this study, I review the evidence on 'low-cost' tools of shareholder activism, such as shareholder proposals and shareholder votes in uncontested director elections, and make suggestions for future research. This form of activism contrasts with what I call 'activism via large ownership', which requires significant equity stakes (e.g. hedge fund activism, proxy fights). 'Activism via large ownership' is not an option for a large class of investors (e.g. diversified funds) and it is prohibitively costly to implement in large firms. Hence, it is important to understand the effectiveness of low-cost activism, also in view of recent regulatory reforms empowering shareholders, such as say on pay, proxy access and the elimination of broker non-votes.

Keywords: Shareholder Activism, Shareholder Voting, Shareholder Proposals, Director Elections, Votes Withheld, Proxy Access, Say on Pay

JEL Classification: G34

Suggested Citation

Ferri, Fabrizio, 'Low Cost' Shareholder Activism: A Review of the Evidence (December 1, 2010). RESEARCH HANDBOOK ON THE ECONOMICS OF CORPORATE LAW, Claire Hill & Brett McDonnell, eds., Elgar Publishers, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1718495

Fabrizio Ferri (Contact Author)

University of Miami - Miami Business School ( email )

Coral Gables, FL 33146-6531
United States

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