Does shareholder proxy access improve firm value? evidence from the business roundtable challenge
Becker, Bo
Does shareholder proxy access improve firm value? evidence from the business roundtable challenge created by Bo Becker, Daniel Bergstresser and Guhan Subramanian - Journal of Law and Economics Volume 56, number 1 .
We use the Business Roundtable's challenge to the SEC's 2010 proxy access rule as a natural experiment to measure the value of shareholder proxy access. We find that firms that would have been most vulnerable to proxy access, as measured by institutional ownership and activist institutional ownership in particular, lost value on October 4, 2010, when the SEC unexpectedly announced that it would delay implementation of the Rule in response to the Business Roundtable challenge. We also examine intra-day returns and find that the value loss occurred just after the SEC's announcement on October 4. We find similar results on July 22, 2011, when the D.C. Circuit ruled in favor of the Business Roundtable. These findings are consistent with the view that financial markets placed a positive value on shareholder access, as implemented in the SEC's 2010 Rule
00222186
Financing Policy--Capital and Ownership Structure--Financial Risk and Risk Management
Government Policy and Regulation--Insider Trading--Information and Market Efficiency
Mergers Acquisitions--Corporate Governance--Restructuring
HB73 JOU
Does shareholder proxy access improve firm value? evidence from the business roundtable challenge created by Bo Becker, Daniel Bergstresser and Guhan Subramanian - Journal of Law and Economics Volume 56, number 1 .
We use the Business Roundtable's challenge to the SEC's 2010 proxy access rule as a natural experiment to measure the value of shareholder proxy access. We find that firms that would have been most vulnerable to proxy access, as measured by institutional ownership and activist institutional ownership in particular, lost value on October 4, 2010, when the SEC unexpectedly announced that it would delay implementation of the Rule in response to the Business Roundtable challenge. We also examine intra-day returns and find that the value loss occurred just after the SEC's announcement on October 4. We find similar results on July 22, 2011, when the D.C. Circuit ruled in favor of the Business Roundtable. These findings are consistent with the view that financial markets placed a positive value on shareholder access, as implemented in the SEC's 2010 Rule
00222186
Financing Policy--Capital and Ownership Structure--Financial Risk and Risk Management
Government Policy and Regulation--Insider Trading--Information and Market Efficiency
Mergers Acquisitions--Corporate Governance--Restructuring
HB73 JOU