Job Market Paper
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.
Presentations: SFI Job Market Workshop (EPFL, 2020), SFI Research Days (Gerzensee, 2020).
Revise & Resubmit at Management Science
Abstract: 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 I construct a novel dataset of excluded and withdrawn proposals from the Securities and Exchange Commission's responses to managers' exclusion requests.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 to the exclusion and withdrawal decisions reveals that non-voted proposals have a value-destroying nature. Special interest investors pursuing self-serving agendas and retail investors advocating for one-size-fits-all reforms explain the harmful character of non-voted proposals. I correct for the selection bias induced by managerial resistance and show that focusing only on voted proposals overstates the shareholder proposals-driven value creation.
Presentations: 35th AFFI Conference (ESCP, 2018), 16th BFRF Conference (Belgian National Bank, 2018), SFI Research Days (Gerzensee, 2018), Columbia University Finance PhD Brownbag Seminar (Columbia Business School, 2020), 3rd Annual Dauphine Finance Ph.D. Workshop (Dauphine University, 2020), 17th Corporate Finance Day (HEC Liège, 2020).
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.