The Study On The Excessive Benefits Of Control For Private Listed Companies

The excessive benefits of control are that the large shareholders (especially the controlling shareholders) get more than the normal benefits of control because of maximizing the interests of the motivation. It is relying on the capacity of controlling, nothing to do with the compensating cost of controlling. The issue which is the excessive benefits of control involving in the expropriation of the minority investors by the large shareholders has become one of the important topics about investor protection and healthy development of the capital market over the past decade. Firstly, the excessive benefits of control are defined in the article. Then the article uses normative analysis, empirical analysis, and case study method, studying on the excessive benefits of control for private listed companies in China. We found in the research: 1.The excessive benefits of control for private listed companies in China are caused of the large shareholders through disposing the control of the company to achieve the ability of private benefits of control, and corporation governance mechanism is not play the role of balancing the large shareholders; 2.The trick that the large shareholders get the excessive benefits of control for private listed companies in China is "tunneling" behavior; 3.For the empirical analysis we conclude that firm size and ownership concentration are negative correlation with the excessive benefits of control. Debt ratio, ROE, the ratio of transfer shares, the ratio of control rights and cash flow rights and pyramidal structure are positive correlation with the excessive benefits of control. Finally, we give some beneficial policy proposals to improve the corporation governance mechanism of private listed companies in China, and improve the level of investor protection. Also, we pointed out the inadequacies of this article and research prospects.