Quick Links

Seminar: Yonca Ertimur, University of Colorado at Boulder

2 May 2014 12:00
to
14:00
Bronfman Building : Room 210, 1001 rue Sherbrooke Ouest Montreal Quebec Canada , H3A 1G5

Inside Director Elections: Determinants and Consequences 

Yonca Ertimur 
University of Colorado at Boulder

Date: May 2, 2014
Time: 11:00 am - 12:30 pm
Location: Room 210

Abstract: 

This paper provides an examination of the determinants and consequences of the voting outcomes at uncontested director elections. Similar to prior studies, we find that proxy advisors’ recommendations are a key determinant of the voting outcome. We then hand collect data from the proxy advisors’ report to document the rationale behind their negative recommendations, and, thus the factor considered by shareholders in casting their votes, and find that votes withheld from directors vary systematically with the reason behind the adverse vote, with board-level and committee-level issues triggering more negative votes than individual-level concerns. As for the economic consequences, similar to earlier studies, labor market consequences of high votes withheld are limited. We conjecture and find that this is because firms respond to shareholder dissatisfaction by addressing the underlying concerns (e.g. adopting the governance provision requested by shareholders, removing certain directors from key committees).  Further, there is a $1.2 million reduction in CEO total pay following withhold recommendations that stem from pay-for-performance concerns.

For more information, please contact Karen Robertson at: karen [dot] robertson [at] mcgill [dot] ca

Source Site: /desautels

Connect with the Desautels Faculty of Management

Desautels Faculty of Management at McGill on FacebookDesautels Faculty of Management at McGill on TwitterFollow the Desautels Faculty of Management University page on LinkedInDesautels Faculty of Management at McGill, BCom Program on LinkedInDesautels Faculty of Management at McGill, MBA Program on LinkedInDesautels Faculty of Management at McGill on YouTubeDesautels Faculty of Management at McGill on Facebook

Research at the Desautels Faculty of Management

Accounting at Desautels Faculty of ManagementFinance at Desautels Faculty of ManagementInformation Systems at Desautels Faculty of ManagementMarketing at Desautels Faculty of ManagementOperations Management at Desautels Faculty of ManagementOrganizational Behaviour at Desautels Faculty of ManagementStrategy and Organization at Desautels Faculty of ManagementHealth Care at Desautels Faculty of Management