Do executives benefit from shareholder disputes? Evidence from multiple large shareholders in Chinese listed firms
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AbstractPrior research documents that ownership by multiple large shareholders (MLS) could alleviate agency conflicts between controlling shareholders and small shareholders through improved monitoring. We provide evidence of a “dark side” to MLS. Using a sample of Chinese listed firms during 2005–2014, we find a positive association between the presence of MLS and excess executive compensation. Furthermore, excess compensation is greater in firms in which the different types of large shareholders have relatively equal voting power. Overall, these results imply that coordination friction among MLS reduces large shareholders' monitoring efficiency and exacerbates agency problems between shareholders and executives.
Acceptance Date15/08/2018
All Author(s) ListYuanli Fang, Maggie Hu, Qingsen Yang
Journal nameJournal of Corporate Finance
Year2018
Month8
Volume Number51
Pages275 - 315
ISSN0929-1199
eISSN1872-6313
LanguagesEnglish-United States
KeywordsMultiple large shareholders, Shareholder identity, Excess compensation, Chinese firms

Last updated on 2020-25-05 at 00:24