The Distribution of Voting Rights to Shareholders

The Distribution of Voting Rights to Shareholders

Vyacheslav Fos, Clifford Holderness

Series number :

Serial Number: 
733/2021

Date posted :

March 02 2021

Last revised :

January 07 2022
SSRN Share

Keywords

  • Shareholder voting • 
  • ex day • 
  • record date • 
  • Corporate governance

This is the first comprehensive study of the distribution of voting rights to shareholders. Only those owning stock on the record date may vote. Firms, however, reveal that date after the fact 91% of the time. With controversial votes, firms are more likely to do the opposite, and this is associated with a lower passage rate for shareholder-initiated proposals.

The NYSE sells non-public record-date information to select investors. When stocks go ex vote, prices decline and trading volume surges, suggesting that investors are buying marginal votes. These trends are most pronounced with controversial votes.

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