2017
Working Paper
HBS Working Paper Series

What Else Do Shareholders Want? Shareholder Proposals Contested by Firm Management

By: Eugene F. Soltes, Suraj Srinivasan and Rajesh Vijayaraghavan

Format:Print
| Language:English
| Pages:50

Abstract

Shareholder proposals provide investors an opportunity to exercise their decision rights within firms, but managers can seek permission from the Securities and Exchange Commission (SEC) to dismiss proposals. We find that managers seek to exclude 39% of all proposals they receive, but the SEC does not permit exclusion in over a quarter of cases. Of the proposals that managers’ contest, but the SEC does not allow exclusion, 21% go on to win shareholder or firm support suggesting that managers often seek to exclude legitimate shareholder interests from their proxy statements. Our analysis illuminates the role that regulators play in mediating differences between firms and shareholders.

Keywords

Voting; Business and Shareholder Relations

Citation

Soltes, Eugene F., Suraj Srinivasan, and Rajesh Vijayaraghavan. "What Else Do Shareholders Want? Shareholder Proposals Contested by Firm Management." Harvard Business School Working Paper, No. 16-132, May 2016. (Revised October 2017.)