Proxy Advisory Firms: The Economics of Selling Information to Voters

• 成果类型: Article
• 署名作者: Malenko, Andrey; Malenko, Nadya
• 署名单位: Boston College
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.12779
• 发表日期: 2019
• 页码: 2441-2490
• 关键词: CORPORATE GOVERNANCE; social value; acquisition; disclosure; mechanism; DESIGN; MARKET; sales; price

摘要

We analyze how proxy advisors, which sell voting recommendations to shareholders, affect corporate decision-making. If the quality of the advisor's information is low, there is overreliance on its recommendations and insufficient private information production. In contrast, if the advisor's information is precise, it may be underused because the advisor rations its recommendations to maximize profits. Overall, the advisor's presence leads to more informative voting only if its information is sufficiently precise. We evaluate several proposals on regulating proxy advisors and show that some suggested policies, such as reducing proxy advisors' market power or decreasing litigation pressure, can have negative effects.