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What Else Do Shareholders Want? Shareholder Proposals Contested by Firm Management

48 Pages Posted: 28 Apr 2016 Last revised: 23 Oct 2017

Eugene F. Soltes

Harvard Business School

Suraj Srinivasan

Harvard Business School

Rajesh Vijayaraghavan

University of British Columbia (UBC) - Sauder School of Business

Date Written: July 14, 2017

Abstract

Shareholder proposals provide investors an opportunity to exercise their decision rights within firms, but managers can seek permission from the Securities and Exchange Commission (SEC) to dismiss proposals. We find that managers seek to exclude 39% of all proposals they receive, but the SEC does not permit exclusion in over a quarter of cases. Of the proposals that managers’ contest, but the SEC does not allow exclusion, 21% go on to win shareholder or firm support suggesting that managers often seek to exclude legitimate shareholder interests from their proxy statements. Our analysis illuminates the role that regulators play in mediating differences between firms and shareholders.

Suggested Citation

Soltes, Eugene F. and Srinivasan, Suraj and Vijayaraghavan, Rajesh, What Else Do Shareholders Want? Shareholder Proposals Contested by Firm Management (July 14, 2017). Harvard Business School Accounting & Management Unit Working Paper . Available at SSRN: https://ssrn.com/abstract=2771114 or http://dx.doi.org/10.2139/ssrn.2771114

Eugene Soltes (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Suraj Srinivasan

Harvard Business School ( email )

Soldiers Field
Boston, MA 02163
United States

HOME PAGE: http://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=pub&facId=10700

Rajesh Vijayaraghavan

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

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