This paper examines the governance role of hedge fund activists by analyzing the impact of these activists on CEO turnover, CEO pay, and CEO pay-performance link in targeted companies. Using the difference-in-difference approach, we first find significantly higher CEO turnover following hedge fund activism. After we split target companies into the CEO-turnover and non-CEO-turnover sub-samples, we find that only new CEOs in targeted companies get more compensation following hedge fund activism while incumbent CEO pay does not significantly change. The relationship between CEO bonuses and return on assets following hedge fund activism also differs across the subsamples split by CEO turnover. Pay-performance relationship is enhanced by hedge fund activism for new CEOs, but not for incumbent CEOs. In additional analyses, we document that CEO turnover is positively associated with Tobin’s Q and shareholder votes on Say on Pay in target companies after hedge fund activism.

本文通过分析对冲基金激进主义者对目标公司的CEO营业额，CEO薪酬和CEO薪酬绩效链接的影响，研究了对冲基金激进主义者的治理作用。使用差异法，我们首先发现对冲基金激进主义后首席执行官的离职率明显提高。在将目标公司分为CEO营业额和非CEO营业额子样本之后，我们发现，在对冲基金积极行动之后，只有目标公司的新CEO可以获得更多的报酬，而现任的CEO薪酬没有明显变化。对冲基金激增后，CEO奖金与资产回报率之间的关系在各个子样本中也有所不同，这些样本均由CEO的离职率划分。对冲基金对新任首席执行官（而非现任首席执行官）的积极性增强了薪酬绩效关系。在其他分析中，我们记录了CEO流动率与Tobin的Q呈正相关，而对冲基金激增后，目标公司的股东对Say on Pay的投票也与票数有关。