The Distribution of Power Among Corporate Managers, Shareholders, and Directors
Michael C. Jensen, A THEORY OF THE FIRM: GOVERNANCE, RESIDUAL CLAIMES AND ORGANIZATIONAL FORMS, Harvard University Press, December 2000
27 Pages Posted: 11 Oct 2000 Last revised: 24 Feb 2012
Date Written: June 1, 1988
This article surveys the seventeen papers in this special issue of the Journal of Financial Economics, and related work. The major findings are: (1) patterns of stock ownership by insiders and outsiders can influence managerial behavior, corporate performance, and stockholder voting in election contests; (2) corporate leverage, inside stock ownership by managers, and the control market are interrelated; (3) departures from one share/one vote affect firm value and efficiency; (4) takeover resistance through defensive restructurings or poison pill provisions is associated with declines in share price; and (5) top management turnover is inversely related to share price performance.
Keywords: Agency Costs, Managerial Stock Ownership, Insiders, Outsiders, Control Market, Corporate Performance, One Share/One Vote, Restructuring, Poison Pill Provisions, Performance
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