Managing the Workload of the Proxy Season

42 Pages Posted: 5 Mar 2021 Last revised: 29 Nov 2022

See all articles by Paul Calluzzo

Paul Calluzzo

Queen's University - Smith School of Business

Simi Kedia

Rutgers Business School

Date Written: September 27, 2022

Abstract

About 52% of all shareholder meetings happen in the proxy season, a short period that lasts from the fourth week of April until the end of May. This concentration leads to an increased workload for ISS, the largest proxy advisor, during which time they must make recommendations on an average of 333 proposals each day, compared to 27 proposals outside it. We find that ISS makes fewer negative recommendations in this busy period and that they are of lower quality. The evidence is consistent with ISS managing its workload by both increasing the threshold that triggers further investigation of proposals and reducing the time its analysts spend on each proposal. These findings suggest that regulatory initiatives aimed at requiring greater transparency of the proxy recommendation process may increase the workload of proxy advisors and may exacerbate problems associated with lower quality recommendations during the busy proxy season.

Keywords: Proxy Advisors, ISS, Proxy Season, Proxy Voting

JEL Classification: G3

Suggested Citation

Calluzzo, Paul and Kedia, Simi, Managing the Workload of the Proxy Season (September 27, 2022). Available at SSRN: https://ssrn.com/abstract=3773931 or http://dx.doi.org/10.2139/ssrn.3773931

Paul Calluzzo

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada

Simi Kedia (Contact Author)

Rutgers Business School ( email )

117 Levin
94 Rockafellar Road
Piscataway, NJ
United States
8484454195 (Phone)

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