Shareholder Meetings Matter: Evidence from the Options Market

44 Pages Posted: 17 Feb 2021 Last revised: 25 May 2021

See all articles by Kateryna V. Holland

Kateryna V. Holland

University of Missouri - Trulaske College of Business

Chan Lim

Purdue University

Irene Yi

University of Toronto

Date Written: May 25, 2021

Abstract

Extant literature finds insignificant abnormal returns around shareholder meetings. We verify those findings but show that option implied volatility gradually declines by about 1.04 percent between record and meeting dates and then by about 0.30 percent right after annual meetings. These declines occur even if meetings do not have shareholder proposals or close votes. The post-meeting decline is more pronounced for meetings with close-call shareholder proposals. Our evidence indicates that investors anticipate meeting outcomes to affect stock prices and that shareholder proposals are consequential but have heterogeneous value implications.

Keywords: Shareholder Meetings, Voting, Uncertainty, Implied Volatility, Market Performance

JEL Classification: G14, G30, G34

Suggested Citation

Holland, Kateryna V. and Lim, Chan and Yi, Irene, Shareholder Meetings Matter: Evidence from the Options Market (May 25, 2021). Available at SSRN: https://ssrn.com/abstract=3765575 or http://dx.doi.org/10.2139/ssrn.3765575

Kateryna V. Holland (Contact Author)

University of Missouri - Trulaske College of Business ( email )

Robert J. Trulaske, Sr. College of Business
403 Cornell Hall
Columbia, MO 65211
United States

Chan Lim

Purdue University ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

Irene Yi

University of Toronto ( email )

Toronto
Canada

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