Blockholder exit threats and excess executive perks

Kejing Chen, Lin Jiang, Yanling Kang, Mo Yang and Jiahua Zhen

International Review of Economics & Finance, 2024, vol. 93, issue PA, 80-97

Abstract: There is a growing interest in the influence of blockholder exit threats on corporate governance. When perceive managerial underperformance, blockholders have strong incentives to reduce their shareholding, which in turn requires managers to align their actions with the interests of shareholders. In this paper, we further develop the theory of blockholder exit threats by scrutinizing the influence of blockholder exit threats on excess executive perks. Empirical results suggest that blockholder exit threats have a significant reducing effect on excess executive perks, which is further confirmed via robustness checks. It is also found that the reducing effect is enhanced when managers’ wealth is closely related to stock prices, blockholders are long-term strategic blockholders, or short selling is allowed, under the condition of a deteriorating information environment or corporate governance, or before the Blockholders Reduction Restrictions.

Keywords: Blockholder exit threat; Excess executive perk; Wealth-performance sensitivity; Corporate governance (search for similar items in EconPapers)
JEL-codes: G30 G32 J33 M52 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056024001850
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:93:y:2024:i:pa:p:80-97

DOI: 10.1016/j.iref.2024.03.021

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().