Review of Financial Studies Vol. 37 No. 2 2024

Shareholder Monitoring through Voting: New Evidence from Proxy Contests

Alon Brav¹; Wei Jiang²; Tao Li³; James Pinnington⁴

¹ Fuqua School of Business, Duke University , USA , ECGI and NBER · ² Goizueta Business School, Emory University , USA , ECGI and NBER · ³ Warrington College of Business, the University of Florida , USA · ⁴ Fuqua School of Business, Duke University , USA

Abstract

We present the first comprehensive study of mutual fund voting in proxy contests. Among contests where voting takes place, passive funds are 10 percentage points less likely than active funds to vote for dissidents. The gap shrinks significantly when accounting for votes withheld from management nominees, settled contests, and votes by non-“Big-Three” fund families. Passive and active funds are equally informed about firm fundamentals, although passive funds view contest-related SEC filings more often than active funds during contests, in absolute levels and incrementally relative to noncontest periods. We conclude that passive funds are engaged shareholders in high-stakes voting events.

DOI

10.1093/rfs/hhad066

Volume

37

Issue

2

Pages

591-638

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓