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Working Paper

Information and Voting Power in the Proxy Process

We document shareholder support for wealth-decreasing changes in corporate governance in the form of antitakeover charter amendments. The enactment of these amendments is shown to be related to ownership structure. This gives rise to a sample selection bias that contaminates traditional event-study results and explains the discrepancy between our findings and those reported in previous studies. We also provide evidence that strategic behavior by managers plays a role in the adoption of these amendments.

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.

Suggested Citation

Bhagat, Sanjai, and Richard Jefferis Jr. 1990. “Information and Voting Power in the Proxy Process.” Federal Reserve Bank of Cleveland, Working Paper No. 90-11.