Document Type
Article
Publication Title
Oklahoma Law Review
Publication Date
2017
ISSN
0030-1752
Page Number
9
Keywords
shareholder voting, proxy contests, director elections
Disciplines
Commercial Law | Law
Abstract
This paper surveys the empirical literature on shareholder voting, specifically on votes related to contested and uncontested director elections and on management proposals. While much of current theory depicts shareholder votes as an ineffective control on the boards decision making, the empirical literature paints a more nuanced picture. When a proxy contest breaks out, shareholders wield immense influence. These contests tend to have significant benefits for the corporation, including facilitating a change in management, reducing unnecessary liquidity, and prompting the payout of dividends. Even in uncontested director elections, shareholders decisions to vote for or withhold their vote reflect the company's performance. The decision to withhold has some albeit slight impact on improving corporate performance going forward. Finally, the evidence suggests that shareholders seriously scrutinize management proposals, instead of blindly following management. ISS and institutional investors have led the charge in this area. For votes on mergers and acquisitions, shareholders do not block all bad acquisitions but do push the scales towards maximizing company value. For management compensation proposals, shareholders appear largely unconcerned with the company's performance but deeply concerned with how the plan dilutes share value. Overall, shareholder voting plays a significant role in corporate management that deserves further research.
Recommended Citation
Randall Thomas and Patrick C. Tricker,
Shareholder Voting in Proxy Contests for Corporate Control, Uncontested Director Elections and Management Proposals, 70 Oklahoma Law Review. 9
(2017)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/959