The Distribution of Voting Rights to Shareholders

60 Pages Posted: 15 Apr 2021 Last revised: 16 Apr 2021

See all articles by Vyacheslav Fos

Vyacheslav Fos

Boston College - Department of Finance; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR)

Clifford G. Holderness

Boston College - Department of Finance

Date Written: March 1, 2021

Abstract

This is the first comprehensive study of the distribution of voting rights to shareholders. Only those owning stock on the record date may vote. Firms, however, reveal that date after the fact 91% of the time. With controversial votes, firms are more likely to do the opposite, and this is associated with a lower passage rate for shareholder-initiated proposals. The NYSE sells non-public record-date information to select investors. When stocks go ex vote, prices decline and trading volume surges, suggesting that investors are buying marginal votes. These trends are most pronounced with controversial votes.

Keywords: Shareholder voting, ex day, record date, corporate governance

JEL Classification: G14, G30, G35

Suggested Citation

Fos, Vyacheslav and Holderness, Clifford G., The Distribution of Voting Rights to Shareholders (March 1, 2021). European Corporate Governance Institute – Finance Working Paper No. 733/2021, Available at SSRN: https://ssrn.com/abstract=3778319 or http://dx.doi.org/10.2139/ssrn.3778319

Vyacheslav Fos (Contact Author)

Boston College - Department of Finance ( email )

Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Clifford G. Holderness

Boston College - Department of Finance ( email )

Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States
617-552-2768 (Phone)
617-277-8071 (Fax)

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