Title: Contesting corporate control: shareholder voting

Authors: Maggie Foley; Robert Boylan; Chengru Hu; Biqing Huang

Addresses: Department of Finance, Jacksonville University, 2800 University Blvd. N., Jacksonville, Florida 32211, USA ' Department of Accounting, Jacksonville University, 2800 University Blvd. N., Jacksonville, Florida 32211, USA ' Department of Finance, SUNY at Canton, 34 Cornell Drive, Canton, NY 13617, USA ' Department of Finance, Angelo State University, 2601 W. Avenue N., San Angelo, Texas 76909, USA

Abstract: In this study we examine the outcome of shareholder proposals and focus on the factors leading to a majority vote. Our findings include: 1) the issues of a proposal play a significant role in determining whether or not the proposal achieves majority shareholder support; 2) ownership structure plays a significant role in the occurrence of a majority vote proposal; 3) most importantly, Institutional Shareholder Services (ISS) recommendations can significantly influence how shareholders vote. When a shareholder proposal which is opposed by management, receives a positive ISS recommendation, this proposal is far more likely to achieve majority shareholder support.

Keywords: shareholder proposals; corporate governance; financial services; shareholder voting; majority vote; ownership structure; institutional shareholder services; shareholder support.

DOI: 10.1504/IJCG.2013.055756

International Journal of Corporate Governance, 2013 Vol.4 No.2, pp.119 - 137

Received: 26 Dec 2012
Accepted: 30 May 2013
Published online: 04 May 2014 *

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