Retail shareholder participation in the proxy process: Monitoring, engagement, and voting

Alon Brav, Matthew Cain and Jonathon Zytnick

Journal of Financial Economics, 2022, vol. 144, issue 2, 492-522

Abstract: We study retail shareholder voting using a nearly comprehensive sample of U.S. ownership and voting records. Analyzing turnout within a rational-choice framework, we find participation increases with ownership and expected benefits from winning and decreases with higher costs of participation. Even shareholders with a negligible likelihood of affecting the outcome have non zero turnout, consistent with consumption benefits from voting. Conditional on participation, retail shareholders punish the management of poorly performing firms. Overall, our evidence provides support for the idea that retail shareholders utilize their voting power to monitor firms and communicate with incumbent boards and management.

Keywords: Retail voting; Shareholder proposal; Proxy advisory firm; Corporate governance (search for similar items in EconPapers)
JEL-codes: D72 G11 G18 G23 G38 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304405X2100341X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:144:y:2022:i:2:p:492-522

DOI: 10.1016/j.jfineco.2021.07.013

Access Statistics for this article

Journal of Financial Economics is currently edited by G. William Schwert

More articles in Journal of Financial Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().