DO OUTSIDE BLOCKHOLDERS INFLUENCE CORPORATE GOVERNANCE PRACTICES?

Sarah W. Peck

A chapter in Corporate Governance, 2004, pp 81-101 from Emerald Group Publishing Limited

Abstract: This study investigates whether block acquisitions lead to changes in board and CEO compensation characteristics and finds that block purchasers do not play a significant role in improving the firm’s governance practices. However, the majority of professional investors have sold their block within a year, suggesting that they do not own their stock long enough to alter governance policies nor to benefit from such changes. For the smaller number of firms where a new blockholder maintains their investment for more than a year, the use of equity based CEO compensation increases while the use of cash based compensation decreases.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:eme:afeczz:s1569-3732(04)09004-8

DOI: 10.1016/S1569-3732(04)09004-8

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