The elimination of broker voting in director elections

- We study the elimination of broker voting in director elections.
- The ban provides an experiment to assess the effect (if any) of shareholder empowerment.
- We find that the elimination did not increase average equity values.

In 2009, the Securities and Exchange Commission (SEC) reformed shareholder voting by eliminating uninstructed broker voting in director elections. We use this reform as a quasi-natural experiment to assess the value of shareholder empowerment. Using different control groups and various cross-sectional tests, we find that the reform did not increase average equity values.