The role of institutional investors in voting: evidence from the securities lending market
Change log
Authors
Aggarwal, P
Chauffaille Saffi, PA
Sturgess, J
Abstract
This paper investigates voting preferences of institutional investors using the unique setting of the securities lending market. Investors restrict lendable supply and/or recall loaned shares prior to the proxy record date to exercise voting rights. Recall is higher for investors with greater incentives to monitor, for firms with poor performance or weak governance, and for proposals where returns to governance are likely higher. At the subsequent vote, recall is associated with less support for management and more support for shareholder proposals. Our results indicate that institutions value their vote and use the proxy process to affect corporate governance.
Description
Keywords
proxy voting, securities lending, institutional investors, value of the vote
Journal Title
The Journal of Finance
Conference Name
Journal ISSN
0022-1082
1540-6261
1540-6261
Volume Title
70
Publisher
Wiley