SECURITIES LENDING AROUND PROXIES: IS THE INCREASE IN LENDING DUE TO PROXY ABUSE OR A RESULT OF DIVIDENDS?

摘要

The notion of empty voting, or borrowing shares of stock to vote without an equivalent economic interest, has captured the attention of both the financial press and financial researchers. We investigate the securities lending market around proxy record dates for evidence of proxy abuse. We verify a weak statistical effect for share capture at the proxy. However, after controlling for dividend record dates (when more stock lending activity occurs), incremental equity lending activity at the proxy is indistinguishable from zero.