Are shareholder proposals all bark and no bite? Evidence from shareholder resolutions to rescind poison pills

We provide a comprehensive examination of shareholder resolutions to rescin d poison pills. We find that pill rescission proposals are more frequent th e more negative the market reaction to the initial pill adoption and the lo wer the insider and unaffiliated block ownership. Votes for such a proposal increase when performance is poor and for more onerous poison pills. While we document a stock price decline associated with the proposal announcemen ts, we find poison pills are more likely to be restructured or rescinded wh en there is a shareholder resolution. Moreover, pill revisions are associat ed with stockholder wealth increases. Collectively, our results suggest tha t pill rescission proposals are more frequent when the pill is more likely to harm shareholders and that managers respond to shareholder proposals.