Strategic voting and insider ownership

Blair B. Marquardt, Brett W. Myers, Xu Niu

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

Manager incentives are viewed as being better aligned with those of shareholders when they have an ownership stake in the firms they manage. However, manager ownership can exacerbate agency problems by better enabling managers to pass shareholder resolutions. We outline a model of strategic shareholder voting that allows outside shareholders to mitigate the influence of insiders. Consistent with our model, we find empirical support for strategic voting by outside shareholders and that strategic voting is more apparent when management-sponsored proposals are controversial or complex, when votes are close, or when other agency risks are greater.

Original languageEnglish
Pages (from-to)50-71
Number of pages22
JournalJournal of Corporate Finance
Volume51
DOIs
StatePublished - Aug 2018

Keywords

  • Insider ownership
  • Management proposals
  • Shareholder voting
  • Strategic voting

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