Do Boards Pay Attention When Institutional Investor Activists 'Just Vote No'?
50 Pages Posted: 12 Aug 2004 Last revised: 14 Jan 2013
Date Written: January 1, 2008
We examine 'just vote no' campaigns, a recent innovation in low-cost shareholder activist tools whereby activists encourage their fellow shareholders to withhold votes toward a director's election to express dissatisfaction with management performance or the firm's corporate governance structure. Grundfest (1993) argues that a substantial withheld vote will motivate directors to take immediate action to avoid further embarrassment. We find a variety of supportive evidence, including operating performance improvements and abnormal disciplinary CEO turnover, indicating that campaigns induce boards to take actions in shareholders' interests. Furthermore, abnormal turnover is robust to controlling for concurrent events and firm- and CEO-specific controls.
Keywords: CEO turnover, shareholder activism, director elections, public pension funds
JEL Classification: G23, G34, G30
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Corporate Governance and Shareholder Initiatives: Empirical Evidence
By Jonathan M. Karpoff, Paul H. Malatesta, ...
Shareholder Passivity Reexamined
The Impact of Shareholder Activism on Target Companies: A Survey of Empirical Findings
Shareholder Activism and Corporate Governance in the United States
The Motivation and Impact of Pension Fund Activism
Monitoring: Which Institutions Matter?
By Kai Li, Jarrad Harford, ...
Hedge Fund Activism, Corporate Governance, and Firm Performance
Does Coordinated Institutional Activism Work? An Analysis of the Activities of the Council of Institutional Investors
By Tim C. Opler and Jonathan S. Sokobin
The Evolution of Shareholder Activism in the United States
By Stuart Gillan and Laura T. Starks
The Case for Increasing Shareholder Power