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QUESTION Investors generally can make one vote for each share of stock they hold. TIAA-CREF is the largest institutional shareholder in the United States; therefore, it holds many shares and has more votes than any other organization. Traditionally, this fund has acted as a passive investor, just going along with management. However, in 1993, it mailed a notice to all 1,500 companies whose stocks it held that henceforth it planned to actively intervene if, in its opinion, management was not performing well. Its goal was to improve corporate performance to boost the prices of the stocks it held. It also wanted to encourage corporate boards to appoint a majority of independent (outside) directors; and it stated that it would vote against any directors of firms that “don’t have an effective, independent board that can challenge the CEO.” In the past, TIAA-CREF responded to poor performance by “voting with its feet,” which means selling stocks that were not doing well. However, by 1993, that position had become difficult to maintain for two reasons. First, the fund invested a large part of its assets in “index funds,” which hold stocks in accordancewith their percentage value in the broad stock market. Furthermore, TIAA-CREF owns such large blocks of stocks in many companies that if it tried to sell out, doing so would severely depress the prices of those stocks. Thus, TIAACREF it tried to sell out, doing so would severely depress the prices of those stocks. Thus, TIAACREF. a. Is TIAA-CREF an ordinary shareholder? Explain. b. Due to its asset size, TIAA-CREF owns many shares in a number of companies. The fund’s management plans to vote those shares. However, TIAA-CREF is owned by many thousands of investors. Should the fund’s managers vote its shares, or should it pass those votes, on a pro rata basis, back to its own shareholders? Explain. Verified answer Other Quizlet setsRelated questionsWhich of the following is a potential advantage of conducting international operations quizlet?Which of the following is a potential advantage of conducting international operations? foreign countries. competes globally, which can translate into improved negotiating power among important groups.
Which of the following is the greatest advantage of international operations?Perhaps the greatest advantage of international operations to a firm is the ability to gain new customers for its products and services, thus increasing revenues. Although growth in revenues and profits is a common expectation of shareholders, it is not a measure of organizational success.
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Strengths of competitors in foreign lands are often ________, and weaknesses are often ________.
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