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Shareholder Monitoring through Voting: New Evidence from Proxy Contests

Author

Listed:
  • Alon Brav
  • Wei Jiang
  • Tao Li
  • James Pinnington

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.Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online

Suggested Citation

  • Alon Brav & Wei Jiang & Tao Li & James Pinnington, 2024. "Shareholder Monitoring through Voting: New Evidence from Proxy Contests," Review of Finance, European Finance Association, vol. 37(2), pages 591-638.
    • Handle: RePEc:oup:revfin:v:37:y:2024:i:2:p:591-638.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhad066
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    Keywords

    G320; G340; G380;
    All these keywords.

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