Working Papers
No Need for Help: The Effect of CEO Incentives on Blockholder Ownership, with Garry Twite [updated on March 6, 2025]
Abstract: We provide novel evidence on the causal effect of CEO incentives on blockholder ownership of a firm. We instrument the change in CEO incentives using CEO stock sales and provide detailed evidence on the instrument's validity. We find that blockholders are attracted to a firm when its CEO incentives decline. The effect is mainly driven by blockholders who actively monitor and is stronger when the CEO is more likely to misbehave ex-ante. Taken together, our results support the substitution effect of incentive contracts on blockholder monitoring and help understand the determinant of blockholder ownership.
Presentation (selected): 2022 FMCG PhD Symposium; 2022 FMA European; 2022 EFA Doctoral Tutorial; 2022 FMA Special PhD Paper Presentation; Asia-Pacific Corporate Finance Online Workshop; 2022 FIRN PhD Symposium; 2022 Paris December Finance Meeting; 2022 AFBC.
Media Coverage: The FinReg Blog, by the Duke Financial Economics Center at Duke University.
Helpful Creditors, Opportunistic Blockholders, with Garry Twite [draft coming soon]
Presentation (selected): 2022 FMCG Conference; 2022 FMA Asia Pacific; 2023 AFBC.
Ownership Concentration and Crisis Recovery, with Yifan Zhou
Presentation (selected): 2023 AFBC.
Work in Progress
Politics and ESG Decisions, with Yuyang Zhang
Information Transmission and Short-Selling, with Bochen Wu
Ownership and Innovation