Research
Publications
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 I construct a novel dataset of excluded and withdrawn proposals from the SEC's responses to managers' requests.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
Winner of the EFA Best Young Researcher Conference Paper Award
Featured in the Duke Law School FinReg Blog
Abstract: Mutual funds must publish proxy voting guidelines announcing how they generally vote on the different ballot items of their portfolio firms. I manually collect 23,000 voting policies from the guidelines of 29 major U.S. mutual fund families over 2006-2018. I find that these policies are a major predictor of funds' voting behavior. Exploiting changes in voting policies, I show that investee companies adopt their mutual fund shareholders' preferred governance provisions. This adoption stems from active voting by mutual fund shareholders and strategic proposal submissions by non-mutual fund shareholders. Proposals aligning with mutual funds' announced preferences generate value when they pass.
Selected presentations: AFA, EFA, CICF, Inquire UK.
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.
Why do mutual funds delegate their voting authority?
