Electronic Proxy Statement Dissemination and Shareholder Monitoring
66 Pages Posted: 8 Dec 2018
Date Written: November 30, 2018
This study examines how the means of disseminating proxy statements affects shareholder monitoring. I exploit the staggered implementation of a regulatory change that allows firms to switch from postal mail to electronic distribution, and estimate that electronic dissemination reduces total voting participation by about 1% to 2%. Under the plausible assumption that all shareholder non-participation is from retail investors, my results imply that retail investor voting non-participation increases by approximately 7% to 17% with electronic distribution. The reduction in retail investor participation shifts routine voting outcomes in favor of management’s recommendations and shift voting outcomes against for non-routine votes. Consistent with management understanding the importance of dissemination channels, I further show management strategically uses its discretion over the choice of the proxy statement dissemination channel to affect voting.
Keywords: notice and access, e-proxy, securities regulation, dissemination, corporate goverance
JEL Classification: G24, G34, G38, M41
Suggested Citation: Suggested Citation