| Summary: | 碩士 === 元智大學 === 財務金融研究所 === 93 === This paper analyzes a sample of firms experiencing proxy contests for seats on their board of directors in the 1988-2004 period. Even if cash-rich firms are more likely to become the targets of proxy contests. In our opinion, the takeover-deterrence effects of excess cash may be an important variable which could influence the results of proxy contests. We find that the result of proxy contest which dissident victory holds more cash than management victory, and REPO Variable (directly affects the outcome of proxy contests through its effect on the distribution of votes) is the most significant factor in increasing the probability of dissident success in proxy contests. We also find that when the dissidents succeed in a proxy contest and it’s a cash-rich firm, abnormal returns following the proxy contest are significantly negative. This suggests that, in cases where dissidents win and with higher cash holding, the market has unrealistic expectations and investor overreaction around proxy contests.
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