Shareholder Dissent Voting and Non-CEO Executive Turnover

Abstract

This study examines how voting dissent from institutional investors affects non-CEO executive turnover. While research on shareholder dissent mostly focuses on director or CEO turnover, it ignores the effect on other top executives. Using a data sample from S&P 1500 firms between 2004 and 2018, we posit and find that when institutional investors withhold votes in director elections, non-CEO executive turnover increases. One reason could be the amplification of directors’ reputation concerns, triggering personnel change with non-CEO executives often becoming scapegoats. We also find that board network size and CEO power strengthen the scapegoating of non-CEO executives. Our findings move beyond the classic two-level framework of agency theory, expanding the understanding of how institutional investors influence corporate strategy.

Keywords: Shareholder Dissent; Institutional Invest; Non-CEO Executive; Turnover; Scapegoat

Date of Award	2025
Original language	English
Awarding Institution	The Hong Kong University of Science and Technology
Supervisor	J.t. Li (Supervisor)