Research
Publications
Forthcoming at Management Science
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 I construct a novel dataset of excluded and withdrawn proposals from the SEC's responses to managers' requests.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
EFA Best Conference Paper by a Young Researcher (The Engelbert Dockner Memorial Prize)
Featured in the Duke Law School FinReg Blog
Abstract: Mutual funds must publish policies announcing how they generally vote on the different ballot items at the shareholder meetings of their portfolio firms. I manually collect 17,000 of these policies for a sample of 29 of the largest U.S. mutual fund families over 2006-2018. I find that voting policies are a major predictor of funds' voting behavior. Exploiting staggered changes in funds' voting policies, I show that investee companies adopt their mutual fund shareholders' preferred governance provisions. This adoption is the result of mutual fund shareholders' active voting. Announced voting policies also stimulate strategic proposal submissions by non-mutual fund shareholders.
Selected presentations: AFA, EFA, CICF.
Work in Progress
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.
