Trading and shareholder voting


Levit, Doron ; Malenko, Nadya ; Maug, Ernst



DOI: https://doi.org/10.2139/ssrn.3463129
URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_i...
Additional URL: https://ecgi.global/sites/default/files/working_pa...
Document Type: Working paper
Year of publication: 2019
The title of a journal, publication series: ECGI Finance Working Paper
Volume: 631
Place of publication: Bruxelles
Publishing house: European Corp. Governance Inst.
Publication language: English
Institution: Business School > ABWL u. Corporate Finance (Maug)
Subject: 330 Economics
Abstract: We study shareholder voting in a model in which trading affects the composition of the shareholder base. In this model, trading and voting are complementary, which gives rise to self-fulfilling expectations about proposal acceptance. We show three main results. First, increasing liquidity and trading opportunities may reduce prices and welfare, because it allows shareholders with more extreme preferences to accumulate large positions and impose their views on more moderate shareholders through voting. Second, prices and welfare can move in opposite directions, which suggests that the former is an invalid proxy for the latter. Third, delegation of the decision to a board of directors may strictly improve shareholder value. However, the optimal board is generally biased, should not be representative of current shareholders, and may not always garner voting support from the majority of shareholders.

Dieser Eintrag ist Teil der Universitätsbibliographie.




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Levit, Doron ; Malenko, Nadya ; Maug, Ernst (2019) Trading and shareholder voting. ECGI Finance Working Paper Bruxelles 631 [Working paper]


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