Abstract

Recent debates have brought attention to the independence of proxy advisors owned by companies that can exert influence on the proxy advisory firm’s voting recommendations. Drawing on the literature on the independence of information intermediaries, this study examines the existence of such issues using a novel hand-collected dataset on owners’ voting intentions on management and shareholder proposals. The evidence suggests that, while the owners’ voting intentions are generally aligned with the proxy advisor’s recommendations, the association likely arises from their shared views on voting issues. Overall, the suggestive evidence does not appear to indicate that the proxy advisor is under the owners’ influence or that its independence is systematically impaired.