Journal of Finance and Bank Management

Proxy Contests Revisited Evidence from the Completed Versus Avoided Proxy Contests
Ning Gao, Ph.D.; Jason Brooks, Esq, LLM

Abstract
Recent years have witnessed a growing number of proxy contests (fights). The number of proxy fights in years from 2012 to 2014 has more than doubled all proxy fights counts since the new millennium through the year 2011. It is a good time to revisit proxy contests. Our paper employs a very different approach to investigate proxy contests. Using a sample from 1995 to 2014 which contains all the cases where a proxy fight is threatened, whether or not a vote eventually occurs, we compare two groups of proxy fights: the completed fights where votes eventually occur versus the avoided fights where no votes occur, to see if there are any differences between their short-run and long-run stock performance. Our evidence suggests that both groups of proxy contests bring significant value increase in the short-period surrounding contest announcements, while they both seem not to have any significant impact on target firms’ stock performance in the long run

Full Text: PDF     DOI: 10.15640/jfbm.v4n1a3