A new study by two business school professors suggests that shareholder resolutions actually do have an impact on company accounting policies.
The study by Fabrizio Ferri of the Harvard Business School and Tatiana Sandino of the Marshall School of Business at the University of Southern California, shows that 150 shareholder proposals in 2003 and 2004 asking companies to start expensing employee stock options actually had an impact.
A total of 16.64 companies that received the resolutions changed their policies as compared to 5.99 percent of the firms in a control group that received no such proposals.
Rule changes by the Financial Accounting Standards Board have required companies to list their employee stock options as an expense.
Shareholder resolutions have long been used to push for corporate reforms. Those getting some of the most attention include environmental ones involving global warming or social concerns such as ending child labor. Now, accounting princples are part of the mix, including “Say on Pay” voting.
