Another Option for Determining the Value of Corporate Votes

This paper proposes a new method using option prices to measure the value of the voting right attached to a stock. The method consists of synthesizing a non-voting share using put-call parity, and comparing its price to that of the underlying stock. Empirically, I find this measure of the value of a voting right to increase around shareholder meetings, particularly for those which are contested. The measure is also more frequently positive for activist hedge fund targets. I estimate the mean (median) annualized value of a voting right to be 1.23% (0.86%) of the underlying stock price