Finance Seminar Vikas Agarwal

The paper examines how shareholder participation shapes the value of corporate voting rights. Using option-implied voting premiums, it shows that while voting rights are a key component of control, their value varies substantially with turnout and remains highly persistent across firms. When participation is low, votes become more likely to be pivotal, leading to a higher valuation of voting rights. 

These differences are reinforced by institutional features and persist over time. Exploiting the 2010 NYSE Rule 452 reform, the study provides causal evidence that declines in shareholder participation increase the voting premium. The study also highlights that low-turnout firms are more likely to experience contentious governance events, such as close votes and activist campaigns, where voting power is especially valuable. 

Takeaway: The value of corporate control depends not just on ownership, but on shareholder participation—linking engagement, voting power, and governance outcomes.