The role of majority shareholders in publicly held corporations. An exploratory analysis

Clifford G. Holderness, Dennis P. Sheehan

Research output: Contribution to journalArticlepeer-review

555 Scopus citations

Abstract

We analyze 114 NYSE- or AMEX-listed corporations with majority shareholders. Majority shareholders are approximately equally divided between corporations and individuals and are typically both directors and officers. When majority blocks trade, stock prices increase and there is substantial management turnover. Although majority shareholders are typically paid larger salaries than officers in diffusely held firms, the difference is small and of marginal significance. Investment policies, the frequency of corporate-control transactions, accounting return, and Tobin's Q are similar for majority-owned and diffusely held firms. Differences in these dimensions do emerge, however, between firms with corporate and individual majority shareholders.

Original languageEnglish (US)
Pages (from-to)317-346
Number of pages30
JournalJournal of Financial Economics
Volume20
Issue numberC
DOIs
StatePublished - Jan 1 1988

All Science Journal Classification (ASJC) codes

  • Accounting
  • Strategy and Management
  • Economics and Econometrics
  • Finance

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