A Requiem for the USA (United Shareholders Association): Is Small Shareholder Monitoring Effective?
Posted: 29 Dec 1998
Date Written: April 1994
From 1986 to 1993, the United Shareholders Association (USA) provided a conduit through which small atomistic shareholders could unite, and attempt to influence the governance of large US corporations. This paper describes the USA's actions and examines its impact on targeted corporations. We document that the USA targeted large firms that underperformed the market and that its influence increased from 1990 to 1993. We find that the announcement of 53 negotiated agreements is associated with a mean abnormal return of 0.9 percent, a $54 million shareholder wealth gain. Our results suggest that USA-sponsored shareholder activism has enhanced shareholder value.
JEL Classification: G34
Suggested Citation: Suggested Citation