An Analysis of Omitted Shareholder Proposals

We intend to reveal the causes and the determinants of the omitted shareholder proposals. We find that individual investors are mostly likely to submit a proposal being excluded from the proxy ballot. Since individual investors are not so skillful as institutional investors, we summarize that shareholder proposals are excluded mainly due to sponsors ’ lack of experience and knowledge, rather than as a self-serving vehicle for shareholder activists to gain bargaining power or to simply annoy management. We also find that most shareholder proposals are omitted because they deal with a matter relating to the company’s ordinary business operations