This paper examines the impact of ES-performance on the value of shareholder voting rights (i.e., voting premium) estimated using option prices. I find companies with higher ES-performance have lower voting premium. The above results are driven mostly by the product-related dimension. Exploiting substantial negative ES-news shock, I confirm that poor ES-performance further increase the voting premium around the shareholder meeting. Given that voting premium reflects associated managerial inefficiencies, my finding are consistent with the view that negative news could be utilized as evidence to exert disciplinary pressure during the ES-meetings. Finally, I neither find that pronounced dynamics reflecting the growing interest in ES, nor voting premium increase after negative ES news.

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This paper examines the impact of ES-performance on the value of shareholder voting rights (i.e., voting premium) estimated using option prices. I find companies with higher ES-performance have lower voting premium. The above results are driven mostly by the product-related dimension. Exploiting substantial negative ES-news shock, I confirm that poor ES-performance further increase the voting premium around the shareholder meeting. Given that voting premium reflects associated managerial inefficiencies, my finding are consistent with the view that negative news could be utilized as evidence to exert disciplinary pressure during the ES-meetings. Finally, I neither find that pronounced dynamics reflecting the growing interest in ES, nor voting premium increase after negative ES news.

Key Words― ESG Performance, Voting Premium, Corporate Governance