46 Pages Posted: 14 Feb 2018 Last revised: 2 Jul 2018
Date Written: June 11, 2018
This paper estimates a spatial model of proxy voting, the W-NOMINATE method for scaling legislatures, and maps institutional investors onto a left-right dimension based on their votes for fiscal year 2012. The far-left are socially responsible and the far-right are “money-conscious” investors. Significant ideological differences reflect an absence of shareholder unanimity. The proxy adviser ISS, similar to a political leader makes voting recommendations that place it center-left; to the left of most mutual funds. Public pension funds and other investors on the left support a more social and environment-friendly orientation of the firm and fewer executive compensation proposals.
Keywords: Institutional Investors, Proxy Voting, Ideal Points, Spatial Model of Voting
JEL Classification: G23, G30, D72
Suggested Citation: Suggested Citation