Shareholder Monitoring Through Voting: New Evidence from Proxy Contests

Shareholder Monitoring Through Voting: New Evidence from Proxy Contests

Alon Brav, Wei Jiang, Tao Li, James Pinnington

Series number :

Serial Number: 
923/2023

Date posted :

July 11 2023

Last revised :

September 09 2023
SSRN Share

Keywords

  • Mutual fund voting • 
  • proxy contest • 
  • Passive Funds • 
  • monitoring

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.

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Published in

Published in: 
Description: 
Review of Financial Studies, Forthcoming

Authors

Professor
Real name:
Wei Jiang
Research Member, Board Member
Emory University Goizueta Business School
Dr
Real name:
Tao Li
University of Warwick
Mr.
Real name:
James Pinnington
Duke University- Fuqua School of Business