The Role of Institutional Investors in Voting: Evidence from the Securities Lending Market

REENA AGGARWAL; PEDRO A. C. SAFFI; JASON STURGESS

doi:10.1111/jofi.12284

journal article Sep 03, 2015

The Role of Institutional Investors in Voting: Evidence from the Securities Lending Market

REENA AGGARWAL PEDRO A. C. SAFFI JASON STURGESS

The Journal of Finance Vol. 70 No. 5 pp. 2309-2346 · Wiley

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Abstract

ABSTRACTThis paper investigates voting preferences of institutional investors using the unique setting of the securities lending market. Investors restrict lendable supply and/or recall loaned shares prior to the proxy record date to exercise voting rights. Recall is higher for investors with greater incentives to monitor, for firms with poor performance or weak governance, and for proposals where returns to governance are likely higher. At the subsequent vote, recall is associated with less support for management and more support for shareholder proposals. Our results indicate that institutions value their vote and use the proxy process to affect corporate governance.

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References

Details

Published: Sep 03, 2015
Vol/Issue: 70(5)
Pages: 2309-2346
License: View

Authors

Cite This Article

REENA AGGARWAL, PEDRO A. C. SAFFI, JASON STURGESS (2015). The Role of Institutional Investors in Voting: Evidence from the Securities Lending Market. The Journal of Finance, 70(5), 2309-2346. https://doi.org/10.1111/jofi.12284

The Role of Institutional Investors in Voting: Evidence from the Securities Lending Market

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