When Shareholders Disagree: Trading After Shareholder Meetings

When Shareholders Disagree: Trading After Shareholder Meetings

Sophia Zhengzi Li, Ernst Maug, Miriam Schwartz-Ziv

Series number :

Serial Number: 

Date posted :

January 31 2019

Last revised :

February 04 2019
SSRN Share


  • shareholder meetings • 
  • voting • 
  • disagreement • 
  • trading • 
  • Volume

This paper analyzes how trading after shareholder meetings changes the composition of the shareholder base. Mutual funds in our sample sell, or buy less, if their votes are opposed to the voting outcome, independently of whether funds oppose or support management.

Trading volume peaks at the meeting date and remains at elevated levels up to four weeks after shareholder meetings; it is higher even when stock prices do not change. These findings are difficult to reconcile with models in which shareholders trade because of differences in information. We explore recently-published models of trading based on disagreement and differences of opinions, which offer sharp predictions on the relationships between volume, volatility, and the autocorrelations of volume. We find strong support for these models in the data, and little to support models in which voting aggregates information. We conclude that shareholders disagree when they vote at meetings, and their beliefs may diverge even more strongly after the meeting. Hence, trading after meetings creates a shareholder base with more homogeneous beliefs. We argue that these findings have important implications for corporate governance.


Real name:
Miriam Schwartz-Ziv
Michigan State University
Real name:
Sophia Zhengzi Li