Wednesday, July 2, 2014
OK, I'll just say it. I think David Yermack is the most talented selector of paper topics out there. His series of tailspotter papers was great. Now, he follows up with Evasive Shareholder Meetings. If you have to hold your shareholder meeting at the bottom of a well, then don't expect that the company has positive news to share. Good stuff. Here's the abstract:
abstract: We study the location and timing of annual shareholder meetings. When companies move their annual meetings a great distance from headquarters, they tend to announce disappointing earnings results and experience pronounced stock market underperformance in the months after the meeting. Companies appear to schedule meetings in remote locations when the managers have private, adverse information about future performance and wish to discourage scrutiny by shareholders, activists, and the media. However, shareholders do not appear to decode this signal, since the disclosure of meeting locations leads to little immediate stock price reaction. We find that voter participation drops when meetings are held at unusual hours, even though most voting is done electronically during a period of weeks before the meeting convenes.