PlumX Metrics
SSRN
Embed PlumX Metrics

Proxy Advisory Firms: The Economics of Selling Information to Voters

SSRN Electronic Journal
2019
  • 64
    Citations
  • 5,987
    Usage
  • 21
    Captures
  • 0
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

  • Citations
    64
    • Citation Indexes
      64
  • Usage
    5,987
    • Abstract Views
      5,036
    • Downloads
      951
  • Captures
    21
  • Ratings
    • Download Rank
      49,574

Article Description

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.

Bibliographic Details

Andrey Malenko; Nadya Malenko

Elsevier BV

Proxy advisors; sale of information; information acquisition; shareholder voting; strategic voting; information aggregation

Provide Feedback

Have ideas for a new metric? Would you like to see something else here?Let us know