Shareholder Activism through Proxy Proposals: The European Perspective

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Shareholder Activism through Proxy Proposals The
European Perspective

• Peter Cziraki
• Tilburg University
• Luc Renneboog
• Tilburg University
• Peter G. Szilagyi
• University of Cambridge Judge Business School

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Motivation

• Proxy proposal
• Empirical literature
• Time-variation
• Inconclusive
• Mostly on the US
• Inter- and intra-continental differences
• Ownership nature, identity, concentration
• Legislation EGMs, proposals
• Enforcement

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Research questions

• Q1 Importance of shareholder proposals
• Q2 Issues addressed
• Q3 Target selection
• Q4 Voting outcomes
• Q5 Short-term market reaction

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Data

• 290 Shareholder proposals (voting outcome known)
  submitted at
• 90 general meetings of
• 63 European firms
• 195 UK (1998-2008)
• 95 Continental Europe (2005-2008)
• Size- and industry-matched peers

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Q1 Use of shareholder proposals
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Q2 Issues addressed
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Q3 Targets
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Q4 Voting outcomes
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Voting success (Appendix B)
Q4
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Q4 Voting success (continued)
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Market reaction to proposals (Table 6)
Q5
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Market reaction to proposals (Table 10)
Q5
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Q5 Market reaction (continued)
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Summary

• Shareholder proposals less frequent in Europe
• Targets
• Underperformers
• Concentrated ownership
• Voting support
• UK
• Management change demanded
• Leverage, Tobins Q
• Adverse stock price reaction

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• Thank you for your attention!

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