Suchergebnisse

American corporations are structured in such a way that shareholders, and shareholders alone, have the right to vote in all significant corporate decisions. Over the years, this exclusive shareholder franchise has been supported by an ongoing procession of justifications. But as those arguments have fallen by the wayside, shareholder primacists have circled back and latched upon a final argument for the special voting status of shareholders, arguing that this fundamental feature of corporate governance is the product of the set of freely-bargained-for agreements among all corporate constituents. Because this set of agreements reflects the preferences of all parties to the corporate contract, they contend, it should thus be viewed as the best way to structure the corporation. The thesis of this Article is that the "nexus of contracts" theory is both descriptively wrong and normatively hollow, and, in particular, provides a poor foundation for the exclusive shareholder franchise. The corporation is neither a mere contract nor a set of contracts, literally or metaphorically. Indeed, the whole notion of the corporation as a nexus of contracts has been a theatrical production of dodges, feints, and posturing designed to rationalize and justify the existing order of things and create the kind of rhetorical space corporate law scholars need to advance their own particular policy positions. Once freed from the constraints of false theories, it is time to do the hard work of starting over and determining what the ideal structure or structures might be for organizations that bring together capital and labor in a process of joint production.

AbstractManuscript TypeEmpiricalResearch Question/IssueShareholders of nearly every company are given the right to vote, yet relatively little is known about the determinants of their voting behavior. Unique data in China render the votes of large shareholders observable, providing a rare opportunity to study the determinants of shareholder voting.Research Findings/InsightsWe find that (a) large shareholders are significantly less likely to vote against reform proposals than small shareholders and (b) institutional investors—especially mutual funds (the largest institutional investors in China)—are significantly less likely to vote against proposals than individual investors.Theoretical/Academic ImplicationsWe provide strong evidence for insider intervention in the voting process. Our study also adds to the understanding of voting behavior of large shareholders and institutional investors along with their governance roles in countries with weak legal protection for investors.Practitioner/Policy ImplicationsTo improve the governance role of shareholder voting in countries with weak investor protection, it is necessary to strengthen the level of disclosure and supervision of shareholder voting decisions.

ABSTRACTManuscript Type:EmpiricalResearch Question/Issue:The paper investigates the determinants of shareholder voting and its relation to CEO pay in the UK. The context of the study is the Directors' Remuneration Report (DRR) Regulations of 2002. This legislation gave shareholders a mandatory non‐binding vote on boardroom pay in the UK.Research Findings/Insights:First, we find that less than 10 per cent of shareholders abstain or vote against the mandated Directors' Remuneration Report (DRR) resolution. This percentage is falling over time. Second, investors are more likely to vote against DRR resolutions compared to non‐pay resolutions. Third, shareholders are more likely to vote against general executive pay resolutions, such as stock options, long‐term incentive plans, and bonus resolutions compared to non‐pay resolutions. Forth, firms with higher CEO pay attract greater voting dissent. Fifth, there is little evidence that CEO pay is lower in firms that previously experienced high levels of shareholder dissent. In addition, there is little evidence that the fraction of CEO equity pay, representing owner‐manager alignment, is greater in such firms. Currently, we find limited evidence that, on average, "say on pay" materially alters the subsequent level and design of CEO compensation.Theoretical/Academic Implications:The study provides new insights on shareholder voting and CEO pay. Theoretically, shareholder voting is endogenously determined.Practitioner/Policy Implications:The study provides insights for practitioners and policy makers interested in shareholder rights, the effects on corporate governance, and say on pay in the UK. Shareholder voting appears to have limited effects on curbing excess CEO pay. Boards and compensation committees may want to communicate better policies on executive compensation to avert shareholder dissent.

We investigate the effect of expressive shareholder dissent voting, in which shareholders use their votes symbolically to express their discontent with management, on subsequent chief executive officer (CEO) dismissals. Using the routine but highly symbolic executive board discharge proposal voted on at the annual shareholder meetings of German firms, we argue that the board of directors understands these votes as a "vote of confidence in management" that challenges the CEO's mandate to lead the firm. Arguing that board chairs are uniquely positioned to take up the stance of a steward of the firm and its leadership, we examine how independent and family board chairs moderate the board's response to expressive voting dissent. Using a sample of German public firms over the period 2008–2015, we find that expressive voting dissent increases the chance of CEO dismissal increasingly with the level of dissent expressed. Contrary to prevailing agency theoretical expectations, we do not find that independent chairs are more responsive to expressive voting dissent, nor that this relationship is strengthened by the degree of minority institutional investor ownership of the firm. Consistent with the symbolic perspective on shareholder voting that we seek to develop, however, we find that family chairs are more likely to lead the board to dismiss the CEO due to the intrinsic disvalue they incur from symbolic leadership legitimacy challenges in their firms, and that the positive effect of having a family chair on the dissent induced chance of CEO dismissal is strengthened by the level of family ownership in the firm.Funding: A University of Illinois at Chicago Summer Research Grant is gratefully acknowledged for S. Sauerwald.

This Comment explores Washington's changing philosophy of shareholder voting and how the current developments to Washington's corporate law have impacted shareholder voting group rights. In light of Washington's corporate law history, the underlying reasons for the amendments, and case law, this Comment argues that the recent amendments have altered, rather than preserved, what has been historically the true philosophy underlying Washington corporate law: minority shareholder rights. Part II of this Comment tracks the evolution of voting group rights through past Washington law and until the present Washington Business Corporation Act. Part III discusses the underlying reasons for the amendments, addresses the specific clarity and substantive revisions to the statute, and compares and contrasts the current amendment with the current Delaware General Corporate Law counterpart. Part IV analyzes relevant cases from jurisdictions that have patterned their corporate law after both Delaware's corporate law and the Model Business Corporation Act. Part V argues that the recent amendments have consequently altered Washington's original philosophy underlying voting groups. Finally, Part VI proposes that the legislature should amend the provision again to conform to Washington's original philosophy.