PhD Oral Exam - Saeid Bazmohammadi, Business Administration

When studying for a doctoral degree (PhD), candidates submit a thesis that provides a critical review of the current state of knowledge of the thesis subject as well as the student’s own contributions to the subject. The distinguishing criterion of doctoral graduate research is a significant and original contribution to knowledge.

Once accepted, the candidate presents the thesis orally. This oral exam is open to the public.

Abstract

Over the past decades, activist hedge funds have come to the forefront of shareholder activism. Often viewed as proactive defenders of shareholder primacy, activist hedge funds acquire ownership stakes in corporations they perceive as mismanaged and advocate for changes to enhance shareholder value. This dissertation examines underexplored aspects of hedge fund activism through three essays, using a longitudinal dataset of companies listed in the Standard & Poor’s (S&P) 500 index between 2000 and 2020.

The first essay, grounded in corporate strategic leadership research, investigates whether social evaluations of CEOs—fame, celebrity, and infamy—affect the likelihood of their firms being targeted by activist hedge funds. Findings suggest that firms attract increased activist attention when their CEOs receive extensive media coverage, achieve celebrity status, or become infamous. I also find that this relationship is more substantial for firms led by female CEOs.

The second essay explores the impact of hedge fund activism on board gender diversity in both targeted and non-targeted firms. Results indicate that activism is associated with declines in board gender diversity in targeted firms, and that this negative effect is mitigated when a celebrity CEO leads the company. Contrary to expectations, no evidence of spillover effects on non-targeted firms was found, and potential explanations for this finding are discussed.

The third essay examines why some firms respond to hedge fund activism with hostile resistance by adopting defensive governance provisions, such as shareholder rights plans. Drawing on upper echelons theory, I argue that CEOs’ political ideologies and power shape corporate resistance strategies against hedge fund targeting. Empirical findings partially support this argument, revealing a strong positive relationship between CEO power and the likelihood of hostile resistance.

Together, these essays contribute to the literature on shareholder activism and corporate strategic leadership, offering new insights into how CEO characteristics and governance dynamics shape firms’ interactions with activist hedge funds.