Do Pension-Related Business Ties Influence Mutual Fund Proxy Voting? Evidence from Shareholder Proposals on Executive Compensation

2012 ◽  
Vol 47 (3) ◽  
pp. 567-588 ◽  
Author(s):  
Rasha Ashraf ◽  
Narayanan Jayaraman ◽  
Harley E. Ryan
Keyword(s):  
Executive Compensation ◽  
Mutual Fund ◽  
Proxy Voting ◽  
Shareholder Proposals ◽  
Fund Families ◽  
Conditional Tests ◽  
Business Ties

AbstractWe examine the relation between mutual fund votes on shareholder executive compensation proposals and pension-related business ties between fund families and the firms. In unconditional tests, we find that fund families support management when they have pension ties to the firm. We find no relation when we stratify by fund family in conditional tests, which suggests that fund families with pension ties vote with management at both client and nonclient firms. We confirm this result in an analysis of nonclient firms. Overall, our results suggest that pension-related business ties influence fund families to vote with management at all firms.

Mutual Fund Voting and Pension Ties : Evidence from Proxy Voting

2017 ◽  
Vol 25 (2) ◽  
pp. 201-228
Author(s):  
Heejin Park
Keyword(s):  
Mutual Funds ◽  
Mutual Fund ◽  
Pension Plan ◽  
Positive Relation ◽  
Fund Managers ◽  
Proxy Voting ◽  
Family Level ◽  
Level I ◽  
The Individual ◽  
Business Ties

Because mutual funds are the largest equity holders and because the retirement assets that are managed by mutual funds have been growing, mutual fund managers may have more incentives to support management in order to attract and retain pension business. I explore whether pension business ties have an impact on voting behaviors of mutual funds by examining the link pension business ties between mutual funds and the firms to actual mutual fund voting outcomes. At the fund family level, I find a positive relation between pension ties and mutual funds’ voting support for management. This relation becomes stronger when there is a voting divergence among funds within the same families. At the individual fund level, I find that individual funds are more likely to vote with management if they are included as one of the investment options of the pension plan of their portfolio firms. This suggests that the SEC should at least consider the recent petition from the AFL-CIO proposing that the SEC require mutual funds to disclose business ties with the firms in which they invest.

The Role of Mutual Funds in Corporate Governance: Evidence from Mutual Funds’ Proxy Voting and Trading Behavior

2016 ◽  
Vol 51 (2) ◽  
pp. 489-513 ◽  
Author(s):  
Ying Duan ◽  
Yawen Jiao
Keyword(s):  
Corporate Governance ◽  
Mutual Funds ◽  
Mutual Fund ◽  
Trading Behavior ◽  
Governance Mechanisms ◽  
Insider Ownership ◽  
Proxy Voting ◽  
Fund Families ◽  
Mutual Fund Families

AbstractThis paper examines mutual fund families’ proxy voting records to analyze their choices between voting against management (“voice”) and voting with their feet (“exit”). Even though proxy voting is particularly conducive to governance through voice rather than exit, we provide evidence that both exit and voice are important governance mechanisms when Institutional Shareholder Services recommends voting against management. Funds with smaller ownership blocks and shorter investment horizons are more likely to exit, and funds are more likely to exit small, liquid firms with greater insider ownership.

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