Working Papers
No Need for Help: The Effect of CEO Incentives on Blockholder Ownership, with Garry Twite [updated on 2024-06-30]
Abstract: Blockholders are becoming more prominent, but there is still much to be understood about what firm characteristics attract blockholders. In this paper, we examine how CEO incentives affect blockholder ownership of a firm. Using uninformative CEO stock sales as an instrument for the change in CEO incentives, we find that weaker CEO incentives attract blockholders to a firm. The effect is stronger on blockholders who actively monitor and on those who want to free-ride the active monitors. The effect is also 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.
Presentation (selected): 2022 FMCG PhD Symposium; 2022 FMA European; 2022 EFA Doctoral Tutorial; 2022 FMA Special PhD Paper Presentation; 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.
Creditor Control Rights and Blockholder, 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