Conference Agenda

This paper studies institutional investors' decision-making using novel data from a major proxy advisor. We highlight the significant role of customized proxy advice in shaping shareholders' voting decisions. About 80% of funds receive customized advice, and custom recommendations differ substantially from benchmark recommendations. We show that customization plays two key roles. First, it helps shareholders express their ideologies through the vote. Second, it facilitates shareholders' decision-making process by reducing the need to pay attention to every proposal individually and enabling focus on the more important proposals. Customization thus influences both the aggregation of preferences and the aggregation of information in voting outcomes. Our findings offer a new perspective on the role of proxy advisors and suggest a shift away from solely focusing on benchmark recommendations.

We propose a portable framework to infer shareholders' preferences, their influence on firms' prosocial decisions, and the resulting economic consequences for firms and marginalized shareholders. Using quasi-experimental variations tied to media coverage of firms' annual general meetings, we find that shareholders support costly prosocial actions, such as covid-related donations and private sanctions on Russia, when these generate image gains. In contrast, shareholders that the public associates less to a specific firm, such as financial corporations with large portfolios, oppose such actions. These prosocial expenditures crowd out investments at exposed firms, reducing productivity and profits by 1 to 3\%. Pursuing the values of some shareholders thus comes at a cost to others, which shareholders' monitoring motivated by heterogeneous preferences could mitigate. By highlighting the interplay between shareholder influence and firms' objectives, this study contributes to the broader debate on activism, showing how unobservable internal conflicts drive corporate responses to societal pressures.

We study how a representative sample of the U.S. population evaluates a broad range of corporate actions from a nonpecuniary perspective. Our core findings, based on large-scale online surveys, are that (i) self-reported nonpecuniary concerns are large, both for stock market investors and non-investors; (ii) concerns about the treatment of workers and CEO pay rank highest, higher than concerns about workforce diversity and fossil energy usage; (iii) moral universalism (Enke (2024)) emerges as a key driver of nonpecuniary preferences, explaining substantial variation both across participants as well as across corporate actions. Combined, our findings provide new evidence on the importance of moral concerns as a driver of nonpecuniary preferences in the context of corporate actions.