El valor del voto

This paper quantifies the market value of the right to vote as the difference in the prices of the stock and the corresponding synthetic stock. Votes are found to have positive value that increases in the time to expiration of the options used to construct the synthetic stocks. Consistent with the theory, the value of vote increases around special meetings, with a larger increase for meetings with a high-ranking agenda, and where the proposal discussed has (ex-post) close votes. The value of the vote increases around M&A events and periods of hedge fund activism. We show that the value of the vote is not bounded by exogenous arbitrage activity – to the contrary – the value of the vote is an important ingredient in the cost of the put call arbitrage activity. We estimate the mean annualized value of a voting right to be 1.58% of the underlying stock price.