How Does the Market React When Shareholders Lose Power?

57 Pages Posted: 6 May 2019 Last revised: 17 Jul 2020

See all articles by Ali C. Akyol

Ali C. Akyol

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

Date Written: July 15, 2020

Abstract

Using a decision made by a corporate vote tabulating firm, I examine how the market views shareholder proposals and whether shareholder empowerment creates value. I find that the type of proposal and its sponsor are important factors. The results show that the market’s reaction was positive for firms with social responsibility proposals and individual investor sponsored proposals, suggesting that such proposals are not viewed as value enhancing by the market.My results suggest that it is important to understand how shareholders get involved in corporate affairs to correctly gauge the benefits and costs of shareholder empowerment.

Keywords: shareholder proposals, shareholder empowerment, governance

JEL Classification: G34

Suggested Citation

Akyol, Ali C., How Does the Market React When Shareholders Lose Power? (July 15, 2020). 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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