Publication Type

Conference Paper

Publication Date

8-2017

Abstract

We identify the power of institutional blockholders to influence management using previous occurrences of forced CEO turnover at other firms in the blockholders’ overall portfolio. We create a “powerful blockholder linkage” measure that strongly predicts future forced CEO turnover. These effects are larger when “powerful” blockholders are more motivated to monitor and when they have had valuable monitoring experience. Moreover, firms with powerful blockholders display higher CEO turnover-performance sensitivity, pursue more value-increasing mergers, and have higher firm value. Overall, our results suggest that an identifiable group of powerful blockholders play an important role in corporate governance.

Keywords

Institutional Blockholders, CEO Turnover, Corporate Governance

Discipline

Corporate Finance | Finance and Financial Management

Research Areas

Finance

Publication

European Finance Association 2017 Annual Meeting, Mannheim, Germany, August 23-26

First Page

1

Last Page

58

City or Country

Mannheim, Germany

Copyright Owner and License

Authors

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

https://www.efa2017.org/

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