Florida SBA recently completed a study of the impact of its proxy voting in proxy contests. See Valuing the Vote: The Impact of Proxy Voting on SBA Portfolio Holdings.
I’d love to see more such analysis at other funds.
An interactive data module was also created (with excellent graphics).
From Florida SBA’s Executive Summary of the Study
- First of its kind empirical analysis of institutional investor’s proxy voting decisions involving dual board nominees and impact on portfolio value.
- Study examines all proxy contests occurring between January 1, 2006 and December 31, 2014 at U.S.-domiciled companies with market capitalizations exceeding $100 million. Florida SBA total investment across all examined companies, at time of contest announcement, equal to $1.9 billion.
- Study evaluates Florida SBA proxy voting decisions related to 107 distinct proxy contests, in which the SBA supported one or more dissident board candidates 65% of the time during the study’s time frame.
- Among Florida SBA votes to support one or more dissident nominees where the dissident won seats, the company’s subsequent 1, 3, and 5-year relative cumulative stock performance was positive, at levels of 12%, 21%, and 26%, respectively. The same returns for cases where SBA supported the dissident but management won all seats were negative, at -14%, -16%, and -15%.
- Florida SBA votes supporting management in initial contests when management subsequently won all seats were associated with a positive economic portfolio gain equal to $137 million over the study’s time frame.
- When Florida SBA supported the dissidents but management won all seats, SBA experienced an aggregate loss of $259 million over the study’s time frame.
- Florida SBA votes supporting dissident nominees where the dissident won in initial contests were associated with a positive economic portfolio gain equal to $51 million in the five years after a contest is announced, over the study’s time frame from 2006 to 2014.
- Study demonstrates Florida SBA equity value linked to proxy contest holdings increased by $572 million (or $5.3 million per vote) in the five years after a contest is announced, during the study’s time frame from 2006 through 2014.
Florida SBA’s Vote Analysis
Data Sources & External Research Information
Florida SBA Approach to Voting on Proxy Contests
Study’s Objective: Assess Efficacy & Quantitative Value of Florida Proxy Voting
Research on the Effects Of Hedge Fund Activism
Florida SBA Corporate Governance & Proxy Voting
Study’s Methodology: Analyze Long-Term Sample of Florida SBA Portfolio Companies
Analysis: Portfolio Returns Improve Due to Activist Investors’ Actions
Average Absolute 1, 3, and 5 Year Performance Impact of Florida SBA Voting Decisions
Analysis: Impact of Supporting or Opposing Management
Average Relative 1, 3, And 5 Year Performance Impact of Florida SBA Voting Decisions
Case Studies: Reviews of Individual Proxy Contest Votes and Post-Contest Performance
Activist Fund Campaigns, by Year and Type of Action
Ranking of Top 50 Activist Funds
Descriptive Statistics of Company Sample and Analysis
Proxy Voting Dataset
Advice and Assistance for Florida SBA Vote Analysis Provided By
Michael Levin, The Activist Investor (TAI); Corina Florea and Meghan Orifici, Institutional Shareholder Services (ISS); Tony Modica and Shawn Dupont, FactSet Research Systems/SharkRepellent; Lydia Mulyk, Okapi Partners; Husein Bektic and James Martin, Activist Insight; and Brian Scott, Tableau Consultant.
Of those providing help, Michael Levin offers up additional comments at “Valuing the Vote” – A Pension Fund Analyzes the Impact of Proxy Voting.