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Shareholder Activism through Proxy Proposals: The European Perspective

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. Motivation. Proxy proposal Empirical literature Time-variation Inconclusive

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Shareholder Activism through Proxy Proposals: The European Perspective

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  1. 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

  2. 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

  3. Research questions Q1: Importance of shareholder proposals Q2: Issues addressed Q3: Target selection Q4: Voting outcomes Q5: Short-term market reaction

  4. 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

  5. Q1: Use of shareholder proposals

  6. Q2: Issues addressed

  7. Q3: Targets

  8. Q4: Voting outcomes

  9. Q4 Voting success(Appendix B)

  10. Q4: Voting success(continued)

  11. Q5 Market reaction to proposals (Table 6)

  12. Q5 Market reaction to proposals (Table 10)

  13. Q5: Market reaction (continued)

  14. Summary • Shareholder proposals less frequent in Europe • Targets • Underperformers • Concentrated ownership • Voting support • UK • Management change demanded • Leverage, Tobin’s Q • Adverse stock price reaction

  15. Thank you for your attention!

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