The Easy Life of Superstar CEOS: Evidence from Shareholder Proposals and Mutual Fund Voting

41 Pages Posted: 6 Apr 2020

See all articles by Thomas David

Thomas David

ESCP Europe - Department of Finance

Alberta Di Giuli

ESCP

Arthur Petit-Romec

SKEMA Business School; Université Côte d'Azur

Date Written: March 9, 2020

Abstract

This paper examines the effect of “superstar” CEOs (i.e. CEOs that win prestigious business awards) on the voting behavior in shareholder proposals. We show that the superstar status strongly affects the outcome of shareholder proposals in favor of the management, both compared to all non-superstar CEOs and to a matched sample of non–winning CEOs. The superstar status affects the vote of all shareholders in general and of mutual funds in particular and is more pronounced in governance proposals and contested ones, showing that CEOs benefit from their superstar status by becoming immune to changes in governance policies promoted by shareholders.

Keywords: Superstar CEO, Business Awards, Corporate Governance, Shareholder Proposals, Mutual Funds, Mutual Fund Voting

JEL Classification: G32, G34

Suggested Citation

David, Thomas and Di Giuli, Alberta and Petit-Romec, Arthur, The Easy Life of Superstar CEOS: Evidence from Shareholder Proposals and Mutual Fund Voting (March 9, 2020). Available at SSRN: https://ssrn.com/abstract=3551223 or http://dx.doi.org/10.2139/ssrn.3551223

Thomas David

ESCP Europe - Department of Finance ( email )

79 Avenue de la République
Paris, 75011
France

HOME PAGE: http://www.thomasdavid.org/

Alberta Di Giuli (Contact Author)

ESCP ( email )

Paris Campus
79, Avenue de la Republique
Paris, 75011
France

Arthur Petit-Romec

SKEMA Business School ( email )

Sophia Antipolis
France

Université Côte d'Azur ( email )

France

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