Yesterday, UCLA Law School Professor Stephen Bainbridge noted the publication of a recent study that reaches some devastating conclusions for public pension funds. The study by Professor Tracie Woidtke at the University of Tennessee found that “public pension funds’ ownership is associated with lower firm value”. To make matters even worse, Professor Woidtke found:
Social-issue shareholder-proposal activism appears to be negatively related to firm value. In this paper, the negative relationship between public pension fund ownership and firm value is significant for firms targeted by public pension funds engaging in social-issue activism—across two different firm samples—in 2008–13, when the two large funds focused on social-issue activism, CalSTRS and the NYSCR, were engaged in shareholder-proposal activism.