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Beyond Dichotomy: The Curvilinear Impact of Employee Ownership on CEO entrenchment

Author

Listed:
  • Xavier Hollandts

    (CRCGM et IFGE - Kedge Business School - Kedge BS - Kedge Business School)

  • Nicolas Aubert

    (CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon, AMU IAE - Institut d'Administration des Entreprises (IAE) - Aix-en-Provence - AMU - Aix Marseille Université)

  • Abdelmehdi Ben Abdelhamid

    (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA [2017-2020] - Université Clermont Auvergne [2017-2020])

  • Victor Prieur

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

Abstract

Employee stock ownership gives employees a voice and therefore may have a major impact on corporate governance. Thus, employee stock ownership may be a powerful mean to protect CEOs from both market for corporate control and dismissal threat. In this paper, we examine the relationship between employee stock ownership and CEO entrenchment. Following the recent French legislative changes, we use a comprehensive panel dataset of the major French listed companies over the 2009-2012 period. We document inverted U shaped relationships between employee stock ownership and CEO entrenchment. Board employee ownership representation also plays a role and increases the inflexion points of these curvilinear relationship.

Suggested Citation

  • Xavier Hollandts & Nicolas Aubert & Abdelmehdi Ben Abdelhamid & Victor Prieur, 2018. "Beyond Dichotomy: The Curvilinear Impact of Employee Ownership on CEO entrenchment," Post-Print halshs-01495427, HAL.
    • Handle: RePEc:hal:journl:halshs-01495427
    DOI: 10.7202/1058165ar
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01495427v2
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    References listed on IDEAS

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    2. Abdelnour Joseph & Aubert Nicolas & Campa Domenico, 2022. "Does employee ownership decrease agency costs? Evidence from French listed companies [L'actionnariat salarié réduit-il les coûts d'agence? Le cas des entreprises françaises cotées]," Post-Print hal-03723164, HAL.

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    Keywords

    CEO entrenchment; employee stock ownership; corporate governance;
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