IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v93y2024ipap80-97.html
   My bibliography  Save this article

Blockholder exit threats and excess executive perks

Author

Listed:
  • Chen, Kejing
  • Jiang, Lin
  • Kang, Yanling
  • Yang, Mo
  • Zhen, Jiahua

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.

Suggested Citation

  • Chen, Kejing & Jiang, Lin & Kang, Yanling & Yang, Mo & Zhen, Jiahua, 2024. "Blockholder exit threats and excess executive perks," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 80-97.
    • Handle: RePEc:eee:reveco:v:93:y:2024:i:pa:p:80-97
    DOI: 10.1016/j.iref.2024.03.021
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056024001850
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2024.03.021?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Blockholder exit threat; Excess executive perk; Wealth-performance sensitivity; Corporate governance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:93:y:2024:i:pa:p:80-97. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.