Anyone writing (or contemplating writing projects) in the shareholding voting space will likely find Randall Thomas (Vanderbilt) & Patrick Tricker's (Davis & Hartman LLP) recent paper, Shareholder Voting in Proxy Contests for Corporate Control, Uncontested Director Elections and Management Proposals: A Review of the Empirical Literature, quite helpful. The paper is a useful resource for those looking for a one-stop comprehensive literature review. (The paper also identifies possible under-explored areas.) One of the paper's main take-aways is that while predictions from prevailing theory may be clear, empirical tests these theory-driven predictions reveal more nuance and comparatively less clarity. The paper's abstract follows.
“This paper surveys the empirical literature on shareholder voting, specifically on votes related to contested and uncontested director elections and on management proposals. While much of current theory depicts shareholder votes as an ineffective control on the board’s decision making, the empirical literature paints a more nuanced picture. When a proxy contest breaks out, shareholders wield immense influence. These contests tend to have significant benefits for the corporation, including facilitating a change in management, reducing unnecessary liquidity, and prompting the payout of dividends. Even in uncontested director elections, shareholders’ decisions to vote for or withhold their vote reflect the company’s performance. The decision to withhold has some albeit slight impact on improving corporate performance going forward.
Finally, the evidence suggests that shareholders seriously scrutinize management proposals, instead of blindly following management. ISS and institutional investors have led the charge in this area. For votes on mergers and acquisitions, shareholders do not block all bad acquisitions but do push the scales towards maximizing company value. For management compensation proposals, shareholders appear largely unconcerned with the company’s performance but deeply concerned with how the plan dilutes share value. Overall, shareholder voting plays a significant role in corporate management that deserves further research.”