Non-incentive Executives' Equity Incentive, Firm Investment Mode and Private Benefits of Control

Abstract

Abstract:

Based on the non-incentive motivation of CEO equity incentives, the hybrid model of corporate governance and CEO power, this paper divides the samples into the type of redemption and the type of welfare. Focusing on the effect on preference of investing and their consequences, we find that: (1) investment preference under two kinds of non-incentive motivation of equity incentives companies are different. The type of redemption firms are more inclined to external acquisition, the type of welfare ones are more inclined to internal investment. (2) Influencing on the form of investment selection and improving the private benefits of controls, the type of redemption equity incentive increase benefits of large controlling shareholders through M&A, and the type of welfare equity incentive improve the executive personnel on-the-job consumption levels by internal investment. These results show that the form of investment options may be a way to improve private benefits of control that implemented the non-incentive motivation of CEO equity incentive.

Key words: non-incentive motivation of equity incentives, internal investment form, external mergers and acquisitions, private benefits of control

Chen Xiaodong, Zhou Jianan. Non-incentive Executives' Equity Incentive, Firm Investment Mode and Private Benefits of Control[J]. , 2016, 28(5): 161-174.

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