Shareholder Empowerment

Abstract

Shareholder rights help discipline agency-prone managers, but they also allow activist shareholders with private benefits to extract rents if there is voting uncertainty. Evidence from proposal activity around labor contract negotiations and the Securities and Exchange Commission no-action-letter decisions supports the rent-extraction view and points to costs of shareholder empowerment that have been neglected in regulatory rulemaking.<Can Shareholder Proposals Hurt Shareholders.pdf><Opportunistic Proposals by Union Shareholders.pdf><A Theory of Shareholder Approval and Proposal Rights.pdf>