Caution should not be thrown to the wind when an institutional investor uses recommendations from a proxy adviser to cast a vote on shareholder issues. According to a new study by Nadya Malenko and Andrey Malenko, associate finance professors at the University of Michigan’s Ross School of Business, proxy advisory firms have incentives to publicize that differ from the company’s management proposes. Nadya and Audrey discuss what this means and why it is essential for investors to be aware of this.
