Proxy contests and the efficiency of shareholder oversight

Research output: Contribution to journalArticlepeer-review

511 Scopus citations

Abstract

Three problems may discourage the use of proxy contests to challenge management and transfer corporate control. First, inefficiency in the system of proxy vote solicitation can give management a vote-getting advantage. Second, due to conflict-of-interest pressures, institutional investors may vote with management against their own fiduciary interests. Third, because some dissident proxy challenges may be 'crank' bids, with no prospect for increasing share values, dissidents may have to incur costs to signal the value of their bid to outside shareholders. Tests on a sample of 100 proxy contests from the period 1981-1985 confirm the existence of these problems.

Original languageEnglish (US)
Pages (from-to)237-265
Number of pages29
JournalJournal of Financial Economics
Volume20
Issue numberC
DOIs
StatePublished - 1988
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management

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