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Shareholder Voting and Corporate Governance

Author

Listed:
  • David Yermack

    () (Finance Department, Stern School of Business, New York University, New York, NY 10012-1126)

Abstract

This article reviews recent research into corporate voting and elections. Regulatory reforms have given shareholders more voting power in the election of directors and in executive compensation issues. Shareholders use voting as a channel of communication with boards of directors, and protest voting can lead to significant changes in corporate governance and strategy. Some investors have embraced innovative empty voting strategies for decoupling voting rights from cash flow rights, enabling them to mount aggressive programs of shareholder activism. Market-based methods have been used by researchers to establish the value of voting rights and show how this value can vary in different settings.

Suggested Citation

  • David Yermack, 2010. "Shareholder Voting and Corporate Governance," Annual Review of Financial Economics, Annual Reviews, vol. 2(1), pages 103-125, December.
  • Handle: RePEc:anr:refeco:v:2:y:2010:p:103-125
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-financial-073009-104034
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    Citations

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    Cited by:

    1. Bar-Isaac, Heski & Shapiro, Joel, 2017. "Blockholder Voting," CEPR Discussion Papers 11933, C.E.P.R. Discussion Papers.
    2. Brochet, Francois & Srinivasan, Suraj, 2014. "Accountability of independent directors: Evidence from firms subject to securities litigation," Journal of Financial Economics, Elsevier, vol. 111(2), pages 430-449.
    3. Li, Yuanzhi & Yermack, David, 2016. "Evasive shareholder meetings," Journal of Corporate Finance, Elsevier, vol. 38(C), pages 318-334.
    4. David Yermack & Yuanzhi Li, 2014. "Evasive Shareholder Meetings," NBER Working Papers 19991, National Bureau of Economic Research, Inc.
    5. Ricardo Correa & Ugur Lel, 2013. "Say on pay laws, executive compensation, CEO pay slice, and firm value around the world," International Finance Discussion Papers 1084, Board of Governors of the Federal Reserve System (U.S.).
    6. Correa, Ricardo & Lel, Ugur, 2016. "Say on pay laws, executive compensation, pay slice, and firm valuation around the world," Journal of Financial Economics, Elsevier, vol. 122(3), pages 500-520.
    7. repec:eee:riibaf:v:42:y:2017:i:c:p:1315-1326 is not listed on IDEAS
    8. Alex Edmans & Vivian W. Fang & Emanuel Zur, 2013. "The Effect of Liquidity on Governance," Review of Financial Studies, Society for Financial Studies, vol. 26(6), pages 1443-1482.
    9. repec:eee:advacc:v:36:y:2017:i:c:p:87-101 is not listed on IDEAS
    10. Armstrong, Christopher S. & Gow, Ian D. & Larcker, David F., 2012. "The Efficacy of Shareholder Voting: Evidence from Equity Compensation Plans," Research Papers 2097, Stanford University, Graduate School of Business.
    11. repec:spr:qualqt:v:51:y:2017:i:5:d:10.1007_s11135-016-0375-5 is not listed on IDEAS
    12. André Schmidt, 2017. "Determinants of Corporate Voting – Evidence from a Large Survey of German Retail Investors," Schmalenbach Business Review, Springer;Schmalenbach-Gesellschaft, vol. 18(1), pages 71-103, February.
    13. Gantchev, Nickolay, 2013. "The costs of shareholder activism: Evidence from a sequential decision model," Journal of Financial Economics, Elsevier, vol. 107(3), pages 610-631.
    14. repec:eee:finlet:v:21:y:2017:i:c:p:34-39 is not listed on IDEAS
    15. Edmans, Alex & Holderness, Clifford, 2016. "Blockholders: A Survey of Theory and Evidence," CEPR Discussion Papers 11442, C.E.P.R. Discussion Papers.
    16. Travis L. Johnson & Nathan Swem, 2017. "Reputation and Investor Activism," Finance and Economics Discussion Series 2017-036, Board of Governors of the Federal Reserve System (U.S.).
    17. repec:bla:stratm:v:38:y:2017:i:9:p:1827-1847 is not listed on IDEAS
    18. Steve Sauerwald & J. (Hans) Van Oosterhout & Marc Van Essen, 2016. "Expressive Shareholder Democracy: A Multilevel Study of Shareholder Dissent in 15 Western European Countries," Journal of Management Studies, Wiley Blackwell, vol. 53(4), pages 520-551, June.
    19. repec:eee:corfin:v:49:y:2018:i:c:p:324-343 is not listed on IDEAS
    20. Karpov, A., 2012. "Corporate Board Elections and Company's Performance," Journal of the New Economic Association, New Economic Association, vol. 16(4), pages 10-25.

    More about this item

    Keywords

    empty voting; say on pay; shareholder activism;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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