Corporate Vote Trading in Australia

71 Pages Posted: 19 Mar 2021

See all articles by Tze Chuan 'Chewie' Ang

Tze Chuan 'Chewie' Ang

Deakin University - Department of Finance; Financial Research Network (FIRN)

Tongxia Li

Beijing Normal University

Date Written: December 16, 2019

Abstract

This study finds that institutional investors in Australia recall loaned shares prior to shareholder meetings to exercise their voting rights as part of their effort to improve corporate governance. Recalls are increasingly common in larger firms, firms with more independent directors, and stocks with higher past returns in recent years. Recalls are associated with less support for resolutions at meetings, especially those related to the remuneration package in firms within the ASX100 and those with existing shareholder dissent. We deduce the value of votes (around 351 bps per annum) from the incremental cost of borrowing shares with voting rights around shareholder meetings.

Keywords: Equity lending, shareholder meeting, corporate vote premium, corporate governance

JEL Classification: G10, G12, G14, G34

Suggested Citation

Ang, Tze Chuan and Li, Tongxia, Corporate Vote Trading in Australia (December 16, 2019). Available at SSRN: https://ssrn.com/abstract=3805744 or http://dx.doi.org/10.2139/ssrn.3805744

Tze Chuan Ang (Contact Author)

Deakin University - Department of Finance ( email )

221 Burwood Highway
Burwood, Victoria 3125
Australia
+61 3 9244 6626 (Phone)

HOME PAGE: http://www.deakin.edu.au/profiles/tze-ang

Financial Research Network (FIRN)

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

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

Tongxia Li

Beijing Normal University ( email )

18 Jinfeng Rd, Xiangzhou Qu
Guangdong Sheng
Zhuhai Shi, Guangdong
China

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