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Shareholder-Manager Contracting in Public Companies

53 Pages Posted: 3 Oct 2017  

Jordan Schoenfeld

University of Utah

Date Written: October 1, 2017


From 1996 to 2015, shareholders and managers executed over 4,400 binding bilateral shareholder agreement contracts. Using hand-collected data from 13D filings, I find that these contracts can specify rights and duties for both shareholders and managers, including director and management appointments, private information access, accounting procedures, dividends, capital structure, strategy, strategic alliances, private placements, and trading restrictions. I also find that these contracts are more prevalent in firms that are more volatile, less profitable, younger, and in firms with weaker information environments. Investors also react more positively to 13Ds that include these contracts, suggesting that these contracts do not arise at the expense of other shareholders. Overall, I conclude that shareholders can control managers through contracts that bypass conventional governance channels.

Keywords: Corporate Governance, Financial Contracting, Shareholder Agreements

JEL Classification: D21, G30, G32, G34, K22, L22

Suggested Citation

Schoenfeld, Jordan, Shareholder-Manager Contracting in Public Companies (October 1, 2017). Available at SSRN:

Jordan Schoenfeld (Contact Author)

University of Utah ( email )

1645 E. Campus Center
Salt Lake City, UT 84112
United States

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