More today on cause and effect proxy advisors and shareholder votes……see preveious post. Say on pay, compensation and governance.
Excerpt……Our study is the first to examine the analysis underlying proxy advisors’ recommendations, to document stock market and firms’ reaction to the release of proxy advisors’ “routine” reports, and to provide a direct estimate of influence of management recommendations on shareholder votes. As such, it provides an important contribution to the literature on shareholder voting, and in particular, on the role of proxy advisors, at a time when policy reforms are empowering shareholder votes. Our findings are also of interest to policy-makers that are considering whether to subject proxy advisors to greater regulatory oversight.