Blockholder monitoring and the efficiency of pay-performance benchmarking

Journal of Corporate Finance

Volumn 16, Issue 5, 2010, Pages 748-766

  Kim, Kyonghee ^a  

^a UNIVERSITY OF MISSOURI   (United States)

Author keywords

Blockholder monitoring; CEO compensation; Investment horizon; Luck; Pay performance sensitivity; Skill

Indexed keywords

EID: 77957918658     PISSN: 09291199     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jcorpfin.2010.08.006     Document Type: Article

References (51)

1. Aggarwal R., Samwick A. Executive compensation, strategic competition, and relative performance evaluation: theory and evidence. J. Finance 1999, 54:1999-2043.
2. Aggarwal R., Samwick A. The other side of the trade-off: the impact of risk on executive compensation. J. Polit. Econ. 1999, 107:65-105.
3. Anderson R., Reeb D. Founding-family ownership and firm performance: evidence from the S&P 500. J. Finance 2003, 58:1301-1328.
4. Antle R., Smith A. An empirical investigation of the relative performance evaluation of corporate executives. J. Acc. Res. 1986, 24:1-39.
5. Barclay M., Holderness C. Private benefits from control of public corporations. J. Financ. Econ. 1989, 25:371-395.
6. Berger P., Ofek E., Yermack D. Managerial entrenchment and capital structure decisions. J. Finance 1997, 52:1411-1438.
7. Bertrand M., Mullainathan S. Are executives paid for luck? The ones without principals are. Quart. J. Econ. 2001, 116:901-932.
8. Bethel J., Liebeskind J., Opler T. Block share purchase and corporate performance. J. Finance 1998, 53:605-634.
9. Bushee B. The influence of institutional investors on myopic R&D investment behavior. Acc. Rev. 1998, 73:305-333.
10. Bushee B. Identifying and attracting the "right" investors: evidence on the behavior of institutional investors. J. Appl. Corp. Financ. 2004, 16:28-35.
11. Celentani M., Loveira R. A simple explanation of the relative performance evaluation puzzle. Rev. Econ. Dyn. 2006, 9:525-540.
12. Chen X., Harford J., Li K. Monitoring: which institutions matter?. J. Financ. Econ. 2007, 86:279-305.
13. Cichello M.S. The impact of firm size on pay-performance sensitivities. J. Corp. Financ. 2005, 11:609-627.
14. Core J., Guay W. The use of equity grants to manage optimal equity incentive levels. J. Acc. Econ. 1999, 28:151-184.
15. Core J., Holthausen R., Larcker D. Corporate governance, chief executive officer compensation, and firm performance. J. Financ. Econ. 1999, 51:371-406.
16. Cronqvist H., Fahlenbrach R. Large shareholders and corporate policies. Rev. Financ. Stud. 2009, 2:3941-3976.
17. Demsetz H., Lehn K. The structure of corporate ownership: causes and consequences. J. Polit. Econ. 1985, 93:1155-1177.
18. Demsetz H., Villalonga B. Ownership structure and corporate performance. J. Corp. Financ. 2001, 7:209-233.
19. Dlugosz J., Fahlenbrach R., Gompers P., Metrick A. Large blocks of stock: prevalence, size, and measurement. J. Corp. Financ. 2006, 12:594-618.
20. Downes G., Houminer E., Hubbard R. Institutional Investors and Corporate Behavior 1999, AEI Press, Washington, DC.
21. Edmans A. Blockholder trading, market efficiency, and managerial myopia. J. Finance 2009, 69:2481-2513.
22. Fahlenbrach R. Founder-CEOs, investment decisions, and stock market performance. J. Financ. Quant. Anal. 2009, 44:439-466.
23. Franks J., Mayer C., Rossi S. Ownership: evolution and regulation. Rev. Financ. Stud. 2009, 22:4009-4056.
24. French, K., 2008. 12 industry portfolios industry definitions. http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/Data_Library/det_12_ind_port.html.
25. Garvey G., Milbourn T. Incentive compensation when executives can hedge the market: evidence of relative performance evaluation in the cross-section. J. Finance 2003, 58:1557-1582.
26. Garvey G., Milbourn T. Asymmetric benchmarking in compensation: executives are rewarded for good luck but not penalized for bad. J. Financ. Econ. 2006, 82:197-225.
27. Gaspar J., Massa M., Matos P. Shareholder investment horizons and the market for corporate control. J. Financ. Econ. 2005, 76:135-165.
28. Gompers P., Metrick A. Institutional investors and equity prices. Quart. J. Econ. 2001, 116:229-259.
29. Gopalan R., Milbourn T., Song F. Strategic flexibility and the optimality of pay for sector performance. Rev. Financ. Stud. 2010, 23:2060-2098.
30. Gorton G.B., Kahl M. Blockholder scarcity, takeovers, and ownership structures. Working paper 2007, Yale University.
31. Harford J., Li K. Decoupling CEO wealth and firm performance: the case of acquiring CEOs. J. Finance 2007, 62:917-949.
32. Hartzell J., Starks L. Institutional investors and executive compensation. J. Finance 2003, 58:2351-2374.
33. Heflin F., Shaw K. Blockholder ownership and market liquidity. J. Financ. Quant. Anal. 2000, 35:621-633.
34. Holderness C. The myth of diffuse ownership in the United States. Rev. Financ. Stud. 2009, 22:1377-1408.
35. Holderness C., Sheehan D. Raiders or saviors? The evidence on six controversial investors. J. Financ. Econ. 1985, 14:555-579.
36. Holderness C., Sheehan D. The role of majority shareholders in publicly held corporations. J. Financ. Econ. 1988, 20:317-346.
37. Holmstrom B. Moral hazard and unobservability. Bell J. Econ. 1979, 10:74-91.
38. Holmstrom B. Moral hazard in teams. Bell J. Econ. 1982, 13:324-340.
39. Huddart S. The effect of a large shareholder on corporate value. Manage. Sci. 1993, 39:1047-1421.
40. Janakiraman S., Lambert R., Larcker D. An empirical investigation of the relative performance evaluation hypothesis. J. Acc. Res. 1992, 30:53-69.
41. Kahn C., Winton A. Ownership structure, speculation and shareholder intervention. J. Finance 1998, 53:99-120.
42. Mehran H. Executive compensation structure, ownership and firm performance. J. Financ. Econ. 1995, 38:163-184.
43. Morck R., Shleifer A., Vishny R. Management ownership and market valuation. J. Financ. Econ. 1988, 20:293-315.
44. Murphy K. Executive Compensation. Handbook of Labor Economics 1999, Vol. 3. Amsterdam, North Holland.
45. Oyer P. Why do firms use incentives that have no incentive effects?. J. Finance 2004, 59:1619-1649.
46. Rosenbaum V.K. Corporate Takeover Defenses 1995, Investor Responsibility Research Center.
47. Rosenbaum V.K. Corporate Takeover Defenses 1998, Investor Responsibility Research Center.
48. Rosenbaum V.K. Corporate takeover defenses 2000, Investor Responsibility Research Center.
49. Shleifer A., Vishny R. A survey of corporate governance. J. Finance 1997, 52:737-783.
50. Smith C., Watts R. The investment opportunity set and corporate financing, dividend, and compensation policies. J. Financ. Econ. 1992, 32:263-292.
51. Stein J. Takeover threats and managerial myopia. J. Polit. Econ. 1988, 96:61-80.