IDEAS home Printed from https://ideas.repec.org/a/oup/rfinst/v34y2021i12p5629-5675..html
   My bibliography  Save this article

The Costs and Benefits of Shareholder Democracy: Gadflies and Low-Cost Activism
[How close are shareholder votes?]

Author

Listed:
  • Nickolay Gantchev
  • Mariassunta Giannetti

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.

Suggested Citation

  • Nickolay Gantchev & Mariassunta Giannetti, 2021. "The Costs and Benefits of Shareholder Democracy: Gadflies and Low-Cost Activism [How close are shareholder votes?]," The Review of Financial Studies, Society for Financial Studies, vol. 34(12), pages 5629-5675.
    • Handle: RePEc:oup:rfinst:v:34:y:2021:i:12:p:5629-5675.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/rfs/hhaa128
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Matteo Gasparini & Peter Tufano, 2023. "The Evolving Academic Field of Climate Finance," Harvard Business School Working Papers 23-057, Harvard Business School.
    2. Alex Edmans, 2023. "The end of ESG," Financial Management, Financial Management Association International, vol. 52(1), pages 3-17, March.

    More about this item

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:rfinst:v:34:y:2021:i:12:p:5629-5675.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/sfsssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.