000			01550nam a22001817a 4500
008			190312b xxu||||| |||| 00| 0 eng d
022			_a0304-405X
245			_aThe unintended consequences of divestment / by Shaun William Davies, Edward Dickersin Van Wesep _cShaun William Davies, Edward Dickersin Van Wesep
260			_aAmsterdam _bElsevier _c June 2018
300			_aPages 558-575
440			_aJournal of Financial Economics _v128 (3) _x0304-405X
520			_aAbstract A divestment campaign aims to depress share prices to induce managers to change firm behavior. Assuming that managers make profit-maximizing decisions in the absence of a campaign, firms that accede to divestors’ demands raise short-run share prices but depress long-run profits. Managers who are more interested in short-run prices are therefore more motivated by divestment than managers who care about long-run profits. We show that, as most managerial compensation contracts reward long-run profitability and stock returns, divestment can be ineffective at best, and perhaps counterproductive, rewarding managers who attract divestment campaigns. In a quantification exercise, we show that the wealth of most executives running likely divestment targets in 2015 would be unaffected by even large movements in share prices. Of those affected, a substantial majority would benefit from divestment.
690			_aDivestment
690			_aExclusionary investment
690			_aSocially responsible investment
690			_aExecutive compensation
942			_2lcc _cSE
999			_c361348 _d361348