The institutional investor now dominates shareholder voting. A major reason for this domination has been the changing preferences of the retail investor. The new retail investor prefers to invest in mutual funds and exchange-traded funds (“ETFs”) that track a market index, such as the S&P 500, instead of spending the time and resources necessary to manage a portfolio of individual stocks held in a brokerage account. When this happens, the voting authority of retail investors is transferred to the investment advisers of these funds.
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