We examine whether the monitoring effectiveness of institutional investors varies with the number of stocks they hold as the largest institutional blockholder (institutional holding number). We find that a larger institutional holding number is associated with higher nonroutine CEO turnover-performance sensitivity, lower total CEO compensation and higher CEO pay-performance sensitivity, more frequent proxy voting against management, and higher abnormal returns around forced CEO turnover announcement and Schedule 13D filing dates. These results are particularly evident when institutional investors have multiple holdings in the same industry or when they have holdings in other firms with prior nonroutine CEO turnover experience. Moreover, the changes in Tobin’s q and operating performance are higher for firms with a larger institutional holding number than firms with a smaller institutional holding number. Our results suggest that information advantages resulting from past learning are important channels through which institutional investors perform effective monitoring.
Keywords: Corporate governance, Institutional ownership, Monitoring, Blockholdings, Experience
JEL Codes: G30, G32, G34
학회소식
[2012년 제 4차] Are Institutional Investors with Multiple Blockhold
작성자 : 관리자
조회수 : 941
게시일 :
2012-12-12
