This thesis analyzes the voting behavior of the Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF). As one of the largest financial services companies in the United States, with over 426 billion Dollar in combined assets under management as of 31 of March 2010, the fund is using proxy voting as a tool to promote positive returns from their investments. This thesis relies on a database constructed out of SEC N-PX lings over a period of six month. The results indicate that TIAA-CREF only withholds directors their vote in a moderate amount of cases. In addition, the fund voted more often against management at proposals cast by shareholders concerning board structures and shareholder rights than at proposals concerning other corporate governance issues.
Table of Contents
1. Introduction
2. Related Literature
3. Sample selection
4. Empirical analysis
4.1 Classification
4.2 Results
5. Conclusion and discussion
Research Objectives and Themes
This thesis investigates the proxy voting behavior of the institutional investor TIAA-CREF to determine if the fund actively engages in shareholder activism to influence corporate policy. It specifically examines whether proxy votes are utilized as a mechanism to pressure management, particularly concerning director elections, board structures, and anti-takeover defenses, during the second half of 2004.
- Analysis of TIAA-CREF's voting patterns regarding management and shareholder proposals.
- Evaluation of shareholder activism as a corporate governance mechanism.
- Investigation of the effectiveness of private negotiations versus public proxy voting.
- Assessment of TIAA-CREF's stance on corporate social responsibility and anti-takeover defenses.
Excerpt from the Book
1 Introduction
Rupert Murdoch and Steve Jobs know how proxy voting works. Not only in their function as director at Fox Entertainment or Pixar, but also during the annual meetings in 2004. Instead of voting together with the management, shareholders withheld the two well-known candidates their vote. Shareholder activism is evolving to become a state of the art tool of majority shareholders, especially for mutual funds. Nowadays, shareholders are making increased use of their say to tackle agency conflicts more directly, turning shareholder activism into an effective corporate governance mechanism. The Teachers Insurance and Annuity Association of America (TIAA–CREF) is one of them making use of its say. In order to manage their underlying assets more effectively they follow an active corporate governance strategy. Rather selling company’s stock following the “Wall street rule”, they are encouraging companies to change their policies.
Summary of Chapters
1. Introduction: This chapter introduces the concept of proxy voting and shareholder activism, outlining the research focus on TIAA-CREF's strategies to influence corporate governance.
2. Related Literature: This section provides an overview of existing academic research on institutional investor activism, shareholder proposals, and the motivations behind voting behavior.
3. Sample selection: This chapter details the collection of proxy votes from SEC N-PX filings for the second half of 2004 and explains the criteria for choosing the Institutional Equity Index Fund.
4. Empirical analysis: This chapter presents the classification of proposals into governance categories and details the results of the descriptive analysis regarding TIAA-CREF's voting behavior.
5. Conclusion and discussion: This concluding chapter summarizes the main findings, discusses their alignment with previous literature, and provides recommendations for further research.
Keywords
Proxy voting, TIAA-CREF, shareholder activism, institutional investors, corporate governance, agency conflicts, SEC N-PX filings, management proposals, shareholder proposals, anti-takeover defenses, corporate social responsibility, board structure, empirical analysis.
Frequently Asked Questions
What is the primary focus of this thesis?
The thesis analyzes the proxy voting behavior of the institutional investor TIAA-CREF to determine if the fund employs shareholder activism to influence the policies of the companies in which it invests.
What are the central themes of the research?
The core themes include shareholder activism, institutional corporate governance strategies, the efficacy of private versus public negotiations, and the influence of institutional investors on management.
What is the main research question?
The research asks if TIAA-CREF uses proxy voting to express dissatisfaction with corporate policy, if it withholds votes from directors when private agreements fail, and if management is becoming more receptive to removing anti-takeover defenses.
What methodology is used in this work?
The author conducts a descriptive empirical analysis of 3,464 proxy votes extracted from SEC N-PX filings for TIAA-CREF during the second half of 2004.
What topics are covered in the main body?
The main body covers a literature review on institutional activism, a detailed description of the sample selection, a classification of proposals into governance categories, and a quantitative analysis of voting outcomes.
Which keywords characterize this work?
Key terms include TIAA-CREF, shareholder activism, proxy voting, corporate governance, institutional investors, and agency conflicts.
How does TIAA-CREF typically approach disagreements with company management?
According to the findings, TIAA-CREF prefers "noiseless" private negotiations; public voting against management is typically used only as a last resort when these private efforts fail to reach an agreement.
What did the analysis reveal about Corporate Social Responsibility (CSR) proposals?
The study found that TIAA-CREF's support for CSR proposals is conditional, depending on the proposal's impact on the company's ethical and social guidelines as well as its consistency with the firm's business interests.
- Quote paper
- Christian Wilk (Author), 2010, Proxy voting behavior of institutional investors: Evidence from TIAA-CREF, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/174185
