Abstract: We measure the value of shareholder proxy access
by using a recent development in the ability of shareholders to
nominate candidates for board seats. We use the SEC’s October 4,
2010 announcement that it would significantly delay
implementation of its August 2010 proxy access rule as a natural
experiment. Because firms with substantial institutional ownership
would have been most affected by the SEC’s now-delayed
changes, we use the share and composition of institutional
investors to sort firms into those more and less affected by the
October 4 news. Firms that would have been most affected by
proxy access, as measured by institutional ownership, lost value on
that day. The value drop was 55 basis points for a 10 percentage
point change in activist institution ownership. These results
suggest that financial markets placed a positive value on
shareholder access, as implemented in the SEC’s August 2010
Rule.