Management (of) Proposals

58 Pages Posted: 20 Apr 2018 Last revised: 22 Dec 2019

See all articles by Ilona Babenko

Ilona Babenko

Arizona State University

Goeun Choi

Arizona State University (ASU) - Finance Department

Rik Sen

University of New South Wales (UNSW)

Date Written: June 7, 2019


Using shareholder voting records on management proposals, we find evidence of managerial influence on outcomes of close votes as there are significantly more proposals that narrowly pass than narrowly fail. This behavior is more pronounced for firms with low institutional ownership and for proposals receiving a negative ISS recommendation. We identify new mechanisms by which managers influence the outcome, such as meeting adjournment and selective campaigning. Finally, the market reacts more positively to the narrow failure of management proposals than to their passage. Combined with our theoretical model, these results imply that managerial influence on the voting process is value-destroying.

Keywords: Corporate Voting, Management Proposals, Shareholder Proposals, Manipulation

JEL Classification: G30, G34, G38

Suggested Citation

Babenko, Ilona and Choi, Goeun and Sen, Rik, Management (of) Proposals (June 7, 2019). Available at SSRN: or

Ilona Babenko (Contact Author)

Arizona State University ( email )

Department of Finance
W.P. Carey School of Business
Tempe, AZ 85287
United States

Goeun Choi

Arizona State University (ASU) - Finance Department ( email )

W. P. Carey School of Business
PO Box 873906
Tempe, AZ 85287-3906
United States

Rik Sen

University of New South Wales (UNSW) ( email )

High St
Sydney, NSW 2052

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