TY - JOUR
T1 - Investor perceptions of board performance
T2 - Evidence from uncontested director elections
AU - Fischer, Paul E.
AU - Gramlich, Jeffrey D.
AU - Miller, Brian P.
AU - White, Hal D.
PY - 2009/12
Y1 - 2009/12
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=70350408328&partnerID=8YFLogxK
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U2 - 10.1016/j.jacceco.2009.09.002
DO - 10.1016/j.jacceco.2009.09.002
M3 - Article
AN - SCOPUS:70350408328
SN - 0165-4101
VL - 48
SP - 172
EP - 189
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
IS - 2-3
ER -