Accounting Papers

Document Type

Journal Article

Date of this Version

12-2009

Publication Source

Journal of Accounting and Economics

Volume

48

Issue

2-3

Start Page

172

Last Page

189

DOI

10.1016/j.jacceco.2009.09.002

Abstract

This paper provides evidence that uncontested director elections provide informative polls of investor perceptions regarding board performance. We find that higher (lower) vote approval is associated with lower (higher) stock price reactions to subsequent announcements of management turnovers. In addition, firms with low vote approval are more likely to experience CEO turnover, greater board turnover, lower CEO compensation, fewer and better-received acquisitions, and more and better-received divestitures in the future. These findings hold after controlling for other variables reflecting or determining investor perceptions, suggesting that elections not only inform as a summary statistic, but incrementally inform as well.

Copyright/Permission Statement

© 2009. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

performance measurement, corporate governance, corporate democracy, director elections

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Date Posted: 27 November 2017

This document has been peer reviewed.