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Labor Unions as Shareholder Activists: Champions or Detractors?
Author(s) -
Prevost Andrew K.,
Rao Ramesh P.,
Williams Melissa A.
Publication year - 2012
Publication title -
financial review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.621
H-Index - 47
eISSN - 1540-6288
pISSN - 0732-8516
DOI - 10.1111/j.1540-6288.2012.00331.x
Subject(s) - shareholder , corporate governance , voting , labor union , business , compensation (psychology) , accounting , labour economics , economics , finance , law , political science , politics , psychology , psychoanalysis
We examine the impact of labor union shareholder activism through the submission of shareholder proposals during the period 1988–2002. We examine the effect of labor union‐sponsored shareholder proposals on announcement period returns; on the corporate governance environment of the firm including shareholder rights, board composition, and CEO compensation; on changes in unionization rates and labor expense; and on long‐run shareholder wealth. We do not find any observable patterns for the overall sample of proposals. However, subsets of proposals associated with union presence at the target firm and shareholder voting support for the proposal are associated with significant effects surrounding and subsequent to targeting.