Directors’ career concerns : evidence from proxy contests and board interlocks

Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/90307

Title:	Directors’ career concerns : evidence from proxy contests and board interlocks
Authors:	Zhang, S
Issue Date:	Jun-2021
Source:	Journal of financial economics, June 2021, v. 140, no. 3, p. 894-915
Abstract:	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 payouts, 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.
Keywords:	Board interlocks Career concerns Corporate governance Proxy contests
Publisher:	Elsevier
Journal:	Journal of financial economics
ISSN:	0304-405X
DOI:	10.1016/j.jfineco.2021.02.001
Appears in Collections:	Journal/Magazine Article

Status	embargoed access
Embargo End Date	2023-06-30

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