Governance Changes through Shareholder Initiatives: The Case of Proxy Access

75 Pages Posted: 26 Jul 2015 Last revised: 21 Feb 2019

See all articles by Tara Bhandari

Tara Bhandari

U. S. Securities and Exchange Commission

Peter Iliev

Pennsylvania State University - Department of Finance

Jonathan Kalodimos

Oregon State University - College of Business

Date Written: February 18, 2019

Abstract

We study a regulatory change that permitted shareholder proposals to instate proxy access. It generated over 300 proposals and led more than 250 firms to adopt proxy access from 2012 to 2016. The firms expected to benefit most from proxy access have the most positive market reaction to receiving a proposal. However, proposals and adoptions are not concentrated at these firms, instead being common at large, well-governed firms. We provide evidence of the tactics used by management to resist proxy access at firms that stand to benefit, and demonstrate that shareholders oppose proxy access more where they have large holdings.

Keywords: Shareholder Proposals, Proxy Access, Private Ordering, Corporate Governance, Activism, Regulation

JEL Classification: G34,G38,K22

Suggested Citation

Bhandari, Tara and Iliev, Peter and Kalodimos, Jonathan, Governance Changes through Shareholder Initiatives: The Case of Proxy Access (February 18, 2019). Fourth Annual Conference on Financial Market Regulation. Available at SSRN: https://ssrn.com/abstract=2635695 or http://dx.doi.org/10.2139/ssrn.2635695

Tara Bhandari (Contact Author)

U. S. Securities and Exchange Commission ( email )

100 F Street NE
Washington, DC 20549
United States

Peter Iliev

Pennsylvania State University - Department of Finance ( email )

348 Business Building
University Park, PA 16802
United States

Jonathan Kalodimos

Oregon State University - College of Business ( email )

Corvallis, OR 97331
United States

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