Ownership Structure, Proxy Contest And Top Management Turnover In Listed Company

This paper investigates the relationship between the ownership structure, proxy contest and top management turnover in Chinese listed company. A proxy contest is a fight between two management teams to gain proxies from shareholders. It is one of the important corporate governance mechanisms. In china proxy contest actually means a fight between different shareholders' interest groups to turnover the incumbent management and control the directorate. The dissident which accumulates a majority of votes wins the competition for corporate control, and result the top turnover.This paper attempts to construct a voting model to analyze how the ownership structure influences the shareholders' power of control in a proxy contest. It will explain the reason of top turnover except the traditional opinion of corporate performance. Also the paper concludes that the modest concentration of ownership structure will increase the feasibility of proxy contest, as a result the top management has frequently been changed, and the corporate performance do not get promotion. We will disclose this phenomenon through cases analyses. On that basis it find that two factors induce this result. First the limitation of inside corporate governance in Chinese listed company will decrease the long-term effect of proxy contest. The other is that dissident's moral risk will weaken the effect and even induce the negative end of the proxy contest. For those reasons, the paper going with the current corporation legislation reform and made some suggestions to promote the voting efficiency in proxy contest, certainly with some optimization of corporate governance measures.The structure of this paper is as below: Chapter 1 is a review of some important literature and raised the question of this paper, also with the main purpose. Chapter 2 analyzed the efficiency of proxy contest, pointed out the theoretical factors that effect the voting efficiency. Chapter 3 constructed a weighted voting model to explain the relationship of ownership structure and top turnover. Chapter 4 through cases analysis check the theoretical conclusion get from the upper demonstration. At last it summarized the research and give some suggestions about proxy contest and other corporate governance.