Featured Work
Jun 12, 2025
Doron Levit, Nadya Malenko | Working Paper No. 00163-00
Nonbinding voting for shareholder proposals
Shareholder proposals are a common form of shareholder activism. Voting for shareholder proposals, however, is nonbinding since management has the authority to reject the proposal even if it received majority support from shareholders. We analyze whether nonbinding voting is an effective mechanism for conveying shareholder expectations. We show that, unlike binding voting, nonbinding voting generally fails to convey shareholder views when manager and shareholder interests...
Jun 5, 2025
Andrey Malenko, Nadya Malenko | Working Paper No. 00158-00
Voting Choice
Traditionally, fund managers cast votes on behalf of fund investors. Recently, there is a shift towards "pass-through voting," with fund managers offering their investors a choice: delegate their votes to the fund or vote themselves. We develop a theory of delegation of voting rights to study the implications of such voting choice. If investors have heterogeneous preferences, voting choice may decrease investor welfare because investors...
Jun 27, 2024
Robin Döttling, Doron Levit, Nadya Malenko, Magdalena Rola-Janicka | Working Paper No. 00153-00
Voting on Public Goods: Citizens vs Shareholders
We study the interplay between a "one person-one vote" political system and a "one share-one vote" corporate governance regime. If shareholders push firms for more pro-social policies, political backlash may arise, undoing ESG initiatives. In a frictionless economy, shareholder democracy becomes irrelevant: the political system fully offsets shareholder influence. With public policy frictions, pro-social corporations can mitigate regulatory shortcomings and enhance corporate public goods provision....
Jan 5, 2021
Doron Levit, Nadya Malenko, Ernst Maug | Working Paper No. 00154-00
The Voting Premium
This paper develops a unified theory of blockholder governance and the voting premium, in a setting without takeovers and controlling shareholders. A voting premium emerges when a minority blockholder tries to influence the composition of the shareholder base by accumulating votes and buying shares from dissenting shareholders. Empirical measures of the voting premium do not reflect the value of voting rights or voting power. A...
Oct 3, 2019
Doron Levit, Nadya Malenko, Ernst G. Maug | Working Paper No. 00157-00
Trading and Shareholder Democracy
We study shareholder voting in a model in which trading affects the composition of the shareholder base. Trading and voting are complementary, which gives rise to self-fulfilling expectations about proposal acceptance and multiple equilibria. Prices and shareholder welfare can move in opposite directions, so the former may be an invalid proxy for the latter. Relaxing trading frictions can reduce welfare because it allows extreme shareholders...
Aug 25, 2018
Ali Kakhbod, Uliana Loginova, Andrey Malenko, Nadya Malenko | Working Paper No. 00155-00
Advising the Management: A Theory of Shareholder Engagement
We study the effectiveness of shareholder engagement, that is, shareholders communicating their views to management. When shareholders and management have different beliefs, each shareholder engages more effectively when other shareholders engage as well. A limited shareholder base can thus prevent effective engagement. However, a limited shareholder base naturally arises under heterogeneous beliefs because investors who most disagree with management do not become shareholders. Passive funds,...
Apr 3, 2016
Andrey Malenko, Nadya Malenko | Working Paper No. 00156-00
Proxy Advisory Firms: The Economics of Selling Information to Voters
We analyze how proxy advisors, which sell voting recommendations to shareholders, affect corporate decision-making. If the quality of the advisor's information is low, there is overreliance on its recommendations and insufficient private information production. In contrast, if the advisor's information is precise, it may be underused because the advisor rations its recommendations to maximize profits. Overall, the advisor's presence leads to more informative voting only...
