@article{b55660b0ba34409f9973b55a0a13c145,
title = "New active blockholders and adjustment of CEO relative incentive ratios",
abstract = "We study the emergence of blockholders as an important mechanism that corrects deviations from target CEO relative debt-to-equity incentive ratios. We find that a new active blockholder more likely emerges when a firm deviates from target; deviations fall during the period the blockholder owns shares; and deviations fall more when the blockholder appoints a director to the firm. When a firm is above (below) target, blockholders are associated with less (more) inside debt and more (no change in) inside equity, implying there is no “one-size-fits-all” compensation change for blockholders. Outside debt and equity increase for both above and below target firms.",
keywords = "Blockholders, CEO compensation, Inside debt",
author = "Nguyen, {Phuong L.} and Neal Galpin and Garry Twite",
note = "Funding Information: This paper previously circulated under the title “New Active Blockholders and the Adjustments of CEO inside debt-equity ratios” and draws upon a chapter of Nguyen's PhD dissertation at Finance Department, The University of Melbourne. In its present form the paper has been extensively revised in line with the comments and suggestions provided by two anonymous referees. We wish to thank Hae Won (Henny) Jung, and Ekaterina Volkova, as well as participants and discussants at FIRN PhD Symposium 2018, FMA Europe 2019, FMA Doctoral Consortium 2019, and EFA 2020 for their helpful comments. Nguyen acknowledge the travel grants from the Faculty of Business and Economics - The University of Melbourne. All remaining errors are our own. Publisher Copyright: {\textcopyright} 2021 Elsevier B.V.",
year = "2022",
month = feb,
doi = "10.1016/j.jcorpfin.2021.102127",
language = "English",
volume = "72",
journal = "Journal of Corporate Finance",
issn = "0929-1199",
publisher = "Elsevier",
}