Management (of) Proposals
57 Pages Posted: 20 Apr 2018 Last revised: 9 Jun 2019
Date Written: June 7, 2019
Using shareholder voting records on management proposals, we find evidence of vote manipulation by management as there are significantly more proposals that narrowly pass than narrowly fail. The strategic behavior by management is more pronounced for firms with low institutional ownership and for proposals receiving a negative ISS recommendation. We identify new mechanisms by which executives 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: Suggested Citation