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The costs of shareholder activism: Evidence from a sequential decision model

Gantchev, Nickolay - In: Journal of Financial Economics 107 (2013) 3, pp. 610-631

This paper provides benchmarks for monitoring costs and evaluates the net returns to shareholder activism. I model activism as a sequential decision process consisting of demand negotiations, board representation, and proxy contest and estimate the costs of each activism stage. A campaign ending...

Persistent link: https://www.econbiz.de/10010635953

Why is hedge fund activism procyclical?

Burkart, Mike; Dasgupta, Amil - C.E.P.R. Discussion Papers - 2013

We provide a theoretical model to explain the procyclicality of hedge fund activism. In our model, hedge funds which compete to retain investor flows excessively increase the net leverage of target firms in order to deliver high short-term payouts and signal their ability. Such excessive...

Persistent link: https://www.econbiz.de/10011084491

The Effect of Liquidity on Governance

Edmans, Alex - 2018

This paper studies the effect of stock liquidity on blockholder governance. Conditional upon acquiring a stake …, liquidity reduces the likelihood that a blockholder governs through voice (intervention) – as shown by the greater propensity to … announcement returns and improvements in operating performance, especially in liquid firms. Moreover, liquidity increases the …

Persistent link: https://www.econbiz.de/10012940410

What are the shareholder value implications of non-voted shareholder proposals?

Couvert, Maxime - 2018

Managerial resistance precludes half of shareholder-initiated proposals from reaching the ballot stage. I construct a novel dataset of excluded and withdrawn proposals from the Securities and Exchange Commission's responses to managers' exclusion requests. An examination of announcement returns...

Persistent link: https://www.econbiz.de/10011976966

Shareholder Activism through the Proxy Process

Renneboog, Luc; Szilagyi, P.G. - Tilburg University, Center for Economic Research - 2009

This paper provides evidence on the corporate governance role of shareholderinitiated proxy proposals. Previous studies debate over whether activists use proxy proposals to discipline firms or to simply advance their self-serving agendas, and whether proxy proposals are effective at all in...

Persistent link: https://www.econbiz.de/10011090883

Shareholder Activism through Proxy Proposals : The European Perspective

Renneboog, Luc; Cziraki, P.; Szilagyi, P.G. - Tilburg University, Center for Economic Research - 2009

This paper is the first to investigate the corporate governance role of shareholderinitiated proxy proposals in European firms. While proposals in the US are nonbinding even if they pass the shareholder vote, they are legally binding in the UK and most of Continental Europe. Nonetheless,...

Persistent link: https://www.econbiz.de/10011091079

Hostile Resistance to Hedge Fund Activism

Boyson, Nicole M. - 2018

When facing hedge fund activists, target firms often fight back. Targets with agency problems and those confronting the threat of investor coordination frequently engage in hostile resistance by implementing governance changes associated with managerial entrenchment. The market negatively...

Persistent link: https://www.econbiz.de/10012935908

How Does Hedge Fund Activism Reshape Corporate Innovation?

Brav, Alon - 2017

This paper studies how hedge fund activism impacts corporate innovation. Firms targeted by activists improve their innovation efficiency over the five-year period following hedge fund intervention. Despite a tightening in R&D expenditures, target firms increase innovation output, as measured by...

Persistent link: https://www.econbiz.de/10012973416

Brick or Treat : Shareholder Activism and Corporate Leasing

Li, Fang; Ormazabal, Gaizka; Vergara-Alert, Carles - 2022

This paper studies the role of shareholder activism on corporate leases. We find that the presence of shareholder activists is associated with large increases in leasing. This association is stronger in periods of high real estate prices and for firms with larger amounts of real estate assets....

Persistent link: https://www.econbiz.de/10014235425

Shareholder activists and frictions in the CEO labor market

Keusch, Thomas - 2021

Using hand-collected data on CEO appointments during shareholder activism campaigns, this study examines whether shareholder involvement in CEO recruiting affects frictions in CEO hiring decisions. The results indicate that appointments of CEOs who are recruited with shareholder activist...

Persistent link: https://www.econbiz.de/10012668370

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