Directors' career concerns: Evidence from proxy contests and board interlocks *

• 成果类型: Article
• 署名作者: Zhang, Shuran
• 署名单位: Hong Kong Polytechnic University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.02.001
• 发表日期: 2021
• 页码: 894-915
• 关键词: Proxy contests; Board interlocks; career concerns; corporate governance

摘要

This paper studies the disciplinary spillover effects of proxy contests on companies that share directors with target firms, that is, interlocked firms. In difference-in-differences tests, I find that interlocked firms reduce excess cash holdings, increase shareholder pay-outs, cut CEO compensation, and engage in less earnings management in the year after proxy contests. The effects are more pronounced when both the interlocked and target firms have a unitary board and when the interlocking director is up for election, is younger, or has shorter tenure. Overall, the evidence highlights the importance of directors' career concerns in policy spillovers across firms with board interlocks. (c) 2021 Elsevier B.V. All rights reserved.