Do Shareholders Vote Their Shares to Maximize a Stock's Value?

The “shareholder primacy” perspective of corporate law presumes that the shareholder’s interest is in maximizing wealth. This presumption has been under attack in recent decades, most recently in the rise of "ESG" oriented investment funds. This research project examines the presumption that shareholders seek to maximize wealth. We will analyze stock price responses to news about the outcome of close corporate proxy fights. If there is a significant share price response, then this provides evidence that many voting shareholders (approximately half, since the votes are close) do not vote their shares to maximize short run value.