Disclosure by firms under voting pressure

Firms with a negative ISS recommendation see significant reduction in shareholder support for their proposals and are likely to face pressure to increase support in upcoming meetings. We find that firms facing voting pressure are significantly more likely to disclose positive content in discretionary sections of Form 8-K that result in higher abnormal stock returns in the months prior to the shareholder meeting. The 8-Ks with good news in discretionary sections, filed prior to the shareholder meeting, are associated with higher support for management proposals in upcoming meetings. Finally, this selective filing of 8-Ks with good news is higher when investors are distracted and lower for family firms. The results point to understudied effect of ISS voting recommendation on firm's selective disclosure.