Can Shareholder Proposals Hurt Shareholders? Evidence from Securities and Exchange Commission No-Action-Letter Decisions

Divestment and Engagement: The Effect of Green Investors on Corporate Carbon Emissions

“…In most American corporations, a shareholder has a right to make proposals that are voted on by shareholders collectively, subject to meeting certain minimum conditions, such as having held stock worth at least $2,000 or 1 percent of firm value continuously for the preceding year (Matsusaka et al 2021). Usually, if a proposal receives a majority of votes, it is said to have been approved, but most proposals are precatory, meaning that managers are not required to implement them even if they pass.…”

“…Usually, if a proposal receives a majority of votes, it is said to have been approved, but most proposals are precatory, meaning that managers are not required to implement them even if they pass. However, investor groups may withhold support for director candidates that do not implement shareholder proposals, and there is evidence that companies do respond to successful proposals, and may even partially accommodate unsuccessful proposals if they attract a sizeable block of votes (Thomas and Cotter 2007;Ertimur et al 2010;Matsusaka and Ozbas 2017).…”

When Investors Speak, Do Firms Listen? The Role of Investors' Dividend‐related Complaints from Online Earnings Communication Conferences

“…Communication with firm managers is often costly for investors (Ertimur et al ., 2010; Cohn et al ., 2016; Matsusaka and Ozbas, 2017; Gulen and O'Brien, 2017), and traditionally, shareholders engage with portfolio firms through voice (direct intervention, such as shareholder proposal or proxy access) or exit (selling their shares and leaving the firm). While voice is often costly, the free‐rider problem further impedes investors' voice unless they hold a substantial stake in the firm (Shleifer and Vishny, 1986; Prevost and Rao, 2000; Cronqvist and Fahlenbrach, 2009; Boyson and Pichler, 2019; Brav et al ., 2018).…”