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Measurement Issues in the Proxy Access Debate

Citation

Publication Date: 
January 18, 2010
Format: 
Working Paper
Bibliography: Joseph Grundfest, Measurement Issues in the Proxy Access Debate, Rock Center for Corporate Governance at Stanford University Working Paper, No. 71 (January 2010).

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Recent empirical data indicate that the Commission’s proxy access proposals reduce shareholder wealth and are inimical to the best interests of the shareholder community at large. Cross-sectional variation in stock price response data further suggest that the Commission should reject a ‘one-size-fits-all’ approach, and that an opt-in rule is less likely to destroy shareholder wealth than an opt-out rule. None of the studies cited by the Commission in its request for further comment support a competing conclusion. The studies cited by the Commission instead suggest a rational basis for the market’s concern that the proxy access process can be captured by a small number of institutions with idiosyncratic objectives that conflict with the best interests of the larger shareholder community.