Labor Unions as Shareholder Activists: Champions or Detractors?

23 Pages Posted: 21 Apr 2012

See all articles by Andrew K. Prevost

Andrew K. Prevost

University of Vermont

Ramesh P. Rao

Oklahoma State University - Stillwater - Spears School of Business - Department of Finance

Melissa A. Williams

University of Houston, Clear Lake - School of Business and Public Administration

Multiple version iconThere are 2 versions of this paper

Date Written: May 2012

Abstract

We examine the impact of labor union shareholder activism through the submission of shareholder proposals during the period 1988–2002. We examine the effect of labor union‐sponsored shareholder proposals on announcement period returns; on the corporate governance environment of the firm including shareholder rights, board composition, and CEO compensation; on changes in unionization rates and labor expense; and on long‐run shareholder wealth. We do not find any observable patterns for the overall sample of proposals. However, subsets of proposals associated with union presence at the target firm and shareholder voting support for the proposal are associated with significant effects surrounding and subsequent to targeting.

Keywords: labor unions, shareholder proposals, shareholder activism

JEL Classification: G30

Suggested Citation

Prevost, Andrew K. and Rao, Ramesh P. and Williams, Melissa A., Labor Unions as Shareholder Activists: Champions or Detractors? (May 2012). Financial Review, Vol. 47, Issue 2, pp. 327-349, 2012. Available at SSRN: https://ssrn.com/abstract=2042976 or http://dx.doi.org/10.1111/j.1540-6288.2012.00331.x

Andrew K. Prevost (Contact Author)

University of Vermont ( email )

Burlington, VT 05405
United States

Ramesh P. Rao

Oklahoma State University - Stillwater - Spears School of Business - Department of Finance ( email )

Spears School of Business
Stillwater, OK 74078-4011
United States
405-744-1385 (Phone)
405-744-5180 (Fax)

Melissa A. Williams

University of Houston, Clear Lake - School of Business and Public Administration ( email )

Houston, TX 77058
United States
(281) 283-3211 (Phone)
(281) 283-3951 (Fax)

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