Partisan Politics and Annual Shareholder Meeting Formats
Annual shareholder meetings are an important institution in corporate governance, providing a forum for shareholders to present proposals and challenge management. Traditionally most shareholder meetings have taken place in person, except at a few tech firms such as Netflix, Inc. The Covid-19 pandemic changed this practice, as public health regulations discouraged or banned large gatherings […]
David Yermack is the Albert Fingerhut Professor of Finance and Business Transformation at New York University Stern School of Business; and Lily Yuanzhi Li is an Assistant Professor of Finance & Real Estate at Villanova University. This post is based on their recent paper.
Annual shareholder meetings are an important institution in corporate governance, providing a forum for shareholders to present proposals and challenge management. Traditionally most shareholder meetings have taken place in person, except at a few tech firms such as Netflix, Inc. The Covid-19 pandemic changed this practice, as public health regulations discouraged or banned large gatherings in mid-March 2020. Nearly all shareholder meetings around this time were suddenly held virtually. As the pandemic ends, with other social activities such as school reverting to in-person, firms also face decisions of whether to keep shareholder meetings online or move back to the traditional in-person format. In a recent paper, we study firms’ choices of the meeting format for their annual shareholder meetings in the pre-Covid, mid-Covid, and post-Covid periods, focusing on the role of partisan politics in these decisions.
