How does the market view shareholder proposals?

48 Pages Posted: 6 May 2019 Last revised: 8 Jun 2021

See all articles by Ali C. Akyol

Ali C. Akyol

University of Ottawa; University of Melbourne; Financial Research Network (FIRN)

Date Written: June 7, 2021

Abstract

I examine a decision made by a corporate vote tabulating firm that removed the ability of proposal sponsors to obtain interim vote tally data in exempt solicitation campaigns. The decision by the firm reduced the probability of the implementation of shareholder proposals and I use it to infer whether the market views that shareholder proposals create value. I find that the market’s reaction to the decision was, overall, positive and its reaction increased depending on the type of proposal and its sponsor. The results suggest that some shareholder proposals are not viewed as value creating by the market and indicate that it is important to understand how shareholders get involved in corporate affairs to correctly gauge the benefits and costs of shareholder proposals.

Keywords: shareholder proposals, shareholder rights, governance

JEL Classification: G34

Suggested Citation

Akyol, Ali C., How does the market view shareholder proposals? (June 7, 2021). Available at SSRN: https://ssrn.com/abstract=3359576 or http://dx.doi.org/10.2139/ssrn.3359576

Ali C. Akyol (Contact Author)

University of Ottawa ( email )

55 Laurier Ave E
Ottawa, Ontario K1N 6N5
Canada

HOME PAGE: http://www.aliakyol.com

University of Melbourne ( email )

198 Berkeley Street
Faculty of Economics and Commerce
Carlton VIC 3010, Victoria 3010
Australia
+61 (3) 8344-5318 (Phone)
+61 (3) 8344-6914 (Fax)

HOME PAGE: http://www.aliakyol.com

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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