Research

Publications

What Are the Shareholder Value Implications of SEC-Challenged Shareholder Proposals?

Management Science (forthcoming)

Abstract: The Securities and Exchange Commission (SEC) permits managers to request the exclusion of shareholder-initiated proposals. I construct a novel dataset of excluded and withdrawn proposals from the SEC's responses to managers' requests. An examination of announcement returns to withdrawal and exclusion decisions demonstrates that SEC-challenged proposals are value-destroying. I find that special interest investors pursuing self-serving agendas and retail investors advocating for one-size-fits-all reforms explain the value-destroying nature of SEC-challenged proposals. On average, the SEC challenge benefits firm value by filtering out these harmful proposals. However, a regression discontinuity design reveals that proposals the SEC refuses to exclude may receive majority shareholder support and destroy firm value.

Working Papers

What Is the Impact of Mutual Funds' ESG Preferences on Portfolio Firms?

Winner of the EFA Best Young Researcher Conference Paper Award

Norwegian Finance Initiative Research Grant

Featured in the Duke Law School FinReg Blog

Abstract: Mutual funds must publish proxy voting guidelines announcing how they generally vote on their portfolio firms' ballot items. I collect and analyze the voting policies from these guidelines for 29 major U.S. mutual fund families over 2006-2018. These policies reveal heterogeneous and evolving environmental, social, and governance (ESG) preferences. Exploiting changes in proxy voting guidelines, I find they significantly impact funds' voting behavior, and portfolio firms adopt their mutual fund shareholders' preferred governance provisions. This adoption stems from mutual funds' active voting and other shareholders' strategic proposal submissions. Proposals aligned with funds' preferences generate value upon passing.

Selected presentations: AFA, EFA, CICF, Inquire UK.

Work in Progress

Changing Ownership Structure and its Implications for Corporate Governance

with Ruediger Fahlenbrach, Zacharias Sautner, and Alexander Wagner

Three-Year Grant from the Norwegian Finance Initiative (NFI) Research Programme

Abstract: In 2020, we obtained the Norwegian Finance Initiative Grant from Norges Bank Investment Management. This three-year grant provides funding for three research papers in which we study the implications of the growing size of (passive) institutional ownership on governance thanks to large-scale surveys and the analysis of proxy-voting guidelines. In particular, we study the evolution of the ESG preferences of large institutional investors, including preferences for board director characteristics. Overall, the three papers will yield new and important insights into (i) how institutional investors shape their preferences, (ii) what influence they have on portfolio firms, and ultimately, (iii) how their stewardship activities carry over into the performance of their investment vehicles.