An Empirical Analysis of Canadian Shareholder Proposals

Abstract

In recent years Canadian shareholders have become more active in submitting proposals on a variety of issues. Our analyses show that proposals submitted by institutions or coordinated shareholder groups gain stronger support than those submitted by individuals and religious groups. In addition, targeted firms are more willing and more likely to reach agreements with institutional investors so as for the activists to withdraw their proposals. The voting behavior of Ontario Teachers’ Pension Plan (OTPP) has strong significant impacts on voting outcomes. The targeted firms’ stock prices respond substantially to news on proposals submitted by institutional and coordinated investors and proposals on social and environmental issues. Differences between Canadian and U.S. shareholder proposals are also highlighted and discussed.