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Western AG shareholding structure explore Lessons for China

Author: HeMin From: www.yourpaper.net Posted: 2009-06-27 17:42:49 Read:
Abstract: By examining the the Western shares of the company's shareholding structure and analyzes the shareholding structure of the United States. Learn from Western AG shareholding structure based on the analysis of the shareholding structure of China's countermeasures subsequent optimization of the shareholding structure of the Chinese stock companies.
Keywords: Western shareholding structure; shareholding structure of the status quo; optimize countermeasures
1 Western AG shareholding structure

AG shareholding structure theory research can be traced back to Berle and Means (1932). They control and ownership separation proposition that dispersed ownership control of the company is in fact owned by managers serious conflict of interest between equity managers and dispersed shareholders, corporate performance can not reach the most superior. In fact, the thought of a conflict of interest between managers and shareholders of the shares of the company's origins can be traced back to Adam Smith, "The Wealth of Nations" has brilliantly described the AG managers neglect and dereliction of duty. Theory began formal study of the shareholding structure Jensen and Meckling (1976). Shareholders' equity agency cost analysis is divided into the internal shareholder has control of the Company, the right to vote and do not have control of the company can only outside shareholders to vote with their feet, and the tendency to privilege-job consumption and internal shareholders, When the the internal shareholding ratio increases, they pay a departure from the company maximize the value of the cost increase, the tendency is to reduce waste of corporate wealth. Later, the theoretical circles series follows the Jensen and Meckling the idea of ??ownership structure and corporate value relationship studies in the framework of the principal-agent analysis literature. Since Mintzberg (1983) proposed ownership structure has two dimensions or two metrics - the owner of the structure of equity and equity concentration of shares in the shareholding structure of the Company theoretical and empirical studies are almost all along the two directions of .
Ownership Concentration, ownership and control separation "proposition Berle and Means (1932) show that there are serious conflicts of interest between managers and shareholders. Along this line of thinking, the subsequent series of studies have shown that dispersed ownership structure is likely to cause small shareholder oversight managers "free rider" problem, the concentrated ownership will help improve the value of the company. Recent literature suggests that concentrated ownership caused a conflict of interest between large shareholders and minority shareholders, the largest shareholder of erosion to the interests of minority shareholders is low, the convergence of interests hypothesis positive value effect than the managers in the defense hypothesis negative value effect, the managers ownership and the value of the company is related; managers higher level of ownership, managers in the defense hypothesis negative value effect is greater than the value of a positive effect in the convergence of interests hypothesis, managers of ownership and value of the company negatively correlated ; manager ownership levels continue to rise, the effect of the positive value of the convergence of interests hypothesis than the negative value effect of the managers in the defense hypothesis positively related to the managers ownership and the value of the company. These conclusions is called Morck synthesis hypothesis (Morck et al. S combined argument).
Stulz (1988) from the the managers ownership and hostile take over to start to establish a theoretical model to take over the market and the level of insider ownership, the purchase price paid to the target company in the hostile takeover with the increase in the proportion of managerial ownership increase, to take over the probability of success is decreased. Hostile takeover constrained control managers, improve the company's price managers a high level of ownership, the value of an effective means is not conducive to hostile takeovers occur, and thus adversely affect the value of the company.
Institutional investors, so far, the relationship between the institutional investors holding the value of the company is an untapped area of ??research. pound (1988) proposed three hypotheses of institutional investors holding the value of the company. (1) the effective supervision of the hypothesis. Compared to the small shareholders, institutional investors have more expertise supervision managers they supervise managers spend low cost, and therefore a positive impact on the value of the company. (2) the interests of consistent hypothesis. Advantage of a business relationship or cooperation between institutional investors and company managers, institutional investors, or out of self-interest, or due to the pressure exerted by the administrator, and may be co-conspirators with the company managers, harm the interests of small shareholders, which have a negative impact on the value of the company. (3) strategic alliance hypothesis. Institutional investors and managers is easy to form a strategic alliance, institutional investors without supervision, to control managers incentives, adversely affect the value of the company. Pound (1988) found that the probability of success of the managers in the proxy contest is an increasing function of the ownership of institutional investors, the support strategic alliances hypothesis.

2 Western shareholding structure of its governance

The United States as a representative of the Anglo-Saxon system, its main feature large shareholding of stock market is highly fragmented, and accompanied by active corporate takeover behavior. Large public company's equity is highly fragmented, so that the company's management at the expense of the interests of shareholders to pursue their own goals at the expense of To solve this problem, some scholars believe that a possible solution is to ownership concentration in the hands of a few large shareholders. However, the concentration of ownership benefits at the same time the introduction of cost. One cost is the largest shareholder may bear excessive risk; another cost is the largest shareholder by virtue of its stock rights to guide the management of part of the small shareholders benefit transferred to their hands. Reason why large institutional investors, the shareholders of the Company in the United States is a "passive" investors, which is also associated with the U.S. legal and institutional restrictions. For example, the United States has restricted common fund to actively participate in the affairs of the company, provisions of the Securities and Exchange Commission (SEC) without the prior permission of the will, and not allowed to collude company's other shareholders to elect directors of the Company or to exert influence on the affairs of the company Therefore, the mutual fund is actually in the Board of Directors of the Company on its own behalf (W ? C Kester, 1994). Through the Hart-Scott-Rodino Act 1976 stipulates, the positive investment any one company in another company, the description must be made to the fair Bureau (Justice Department) and the Federal Trade Commission (M ? Blsir 1995). 3 shareholding structure

One hand, ownership concentration, due to the dominance of state-owned shares the situation persists, resulting witch hunt, operating mechanism is difficult to change. Ownership structure is the basis of the corporate governance structure, an important aspect of the corporate governance structure, that is, "What is the shareholding structure, there are what the company structure In China, the vast majority of listed companies by the state-owned enterprise restructuring restructuring from, and thus rendered abroad shares of the dominant characteristics of a high concentration of equity ownership structure. The shares of the company under this equity structure is difficult to establish an effective corporate governance structure. Because the government only the identity of the owners of assets involved in business management, but the government in the exercise of this power of shareholders, often with a strong administrative colors, often directly involved in business management, beyond a general sense of the government and enterprises the agency relationship between the government and enterprises separation is difficult to realize, and thus constrain the enterprise operational mechanism, so that the new company's shares often rehashing. On the other hand, equity excessive concentration is not conducive to the managers to accept the supervision of the public shareholders in a wider context and constraints, so that even the existing board of directors and managers, operating inefficiencies, benefit the poor, the public also difficult feet "The poll removed from the job of senior management, and there are likely to damage the interests of minority shareholders.

4 from abroad, build an effective equity governance structure

Build an effective equity governance structure is intended to optimize the corporate governance body. The one hand, the reduction of state-owned shares, reduce the degree of ownership concentration, the state-controlled listed companies diversifying the stock; On the other hand, the nurturing of management controlling system and various types of legal persons controlling shareholder, fully mobilize the enthusiasm of managers and institutional.
(1) and strive to make the management to hold larger shares of the enterprise, and promote management efficiency. The management holds shares to reduce the principal-agent costs, weakening commissioned agent contradictions. Value orientation between the owners and operators, and operators are more concerned about the job during the operating results and personal interests. Assessment system developed by the enterprise, the enterprise is difficult to face different operators to develop a long-term assessment methods. Operators will pay more attention to the short-term benefits of the enterprise in order to please the decision makers is very detrimental to the long-term development of the enterprise. Defined by the implementation of equity the Placing and equity incentive system, may not be resold, closely linked to the interests of management and the company's operating results during his tenure. So good at: first, help to improve the operator's enthusiasm. Operators through its own operating results to reward or punishment, reward operators to participate in the remaining allocation of certain equity operators, in fact, have some equity managers. In order to maximize its own operating results and personal income, the operators will redouble our efforts to expand business survival. Second, to promote the long-term development of the enterprise. Equity incentives to seek to carry out a comprehensive evaluation of the performance of the company, is not concerned about the short-term benefits, but concerned about the future development of space. And equity incentive not only to make the operators benefit during his term of office, the right enterprise development strategy in its retiring after the long-term benefit.
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