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The costs and benefits of shareholder democracy : gadflies and low-cost activism
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Gantchev, Nickolay and Giannetti, Mariassunta (2021) The costs and benefits of shareholder democracy : gadflies and low-cost activism. The Review of Financial Studies, 34 (12). pp. 5629-5675. doi:10.1093/rfs/hhaa128 ISSN 0893-9454.
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Official URL: http://dx.doi.org/10.1093/rfs/hhaa128
Abstract
We show that there is cross-sectional variation in the quality of shareholder proposals. On average, proposals submitted by the most active individual sponsors are less likely to receive majority support, but they occasionally pass if shareholders mistakenly support them and may even be implemented due to directors’ career concerns. While gadfly proposals destroy shareholder value if they pass, shareholder proposals on average are value enhancing in firms with more informed shareholders. We conclude that more informed voting could increase the benefits associated with shareholder proposals.
Item Type: | Journal Article | ||||||||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance |
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Divisions: | Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School |
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Library of Congress Subject Headings (LCSH): | Stockholders, Corporations -- Investor relations, Stockholders' meetings , Stockholders' pre-emptive rights | ||||||||||||
Journal or Publication Title: | The Review of Financial Studies | ||||||||||||
Publisher: | Oxford University Press | ||||||||||||
ISSN: | 0893-9454 | ||||||||||||
Official Date: | December 2021 | ||||||||||||
Dates: |
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Volume: | 34 | ||||||||||||
Number: | 12 | ||||||||||||
Page Range: | pp. 5629-5675 | ||||||||||||
DOI: | 10.1093/rfs/hhaa128 | ||||||||||||
Status: | Peer Reviewed | ||||||||||||
Publication Status: | Published | ||||||||||||
Reuse Statement (publisher, data, author rights): | This is a pre-copyedited, author-produced version of an article accepted for publication in The Review of Financial Studies following peer review. The version of record Nickolay Gantchev, Mariassunta Giannetti, The Costs and Benefits of Shareholder Democracy: Gadflies and Low-Cost Activism, The Review of Financial Studies, hhaa128, is available online at:https://doi.org/10.1093/rfs/hhaa128 | ||||||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||||||
Date of first compliant deposit: | 13 November 2020 | ||||||||||||
Date of first compliant Open Access: | 12 November 2022 | ||||||||||||
Grant number: | , the Jan Wallander and Tom Hedelius Foundation, and the Swedish House of Finance | ||||||||||||
RIOXX Funder/Project Grant: |
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