The influence of executive stock plan and other non-fundamental factors on the investment activity of Russian companies

Abstract

In those companies where the division of owner and controlling functions is obligatory, there is always a contradiction between the company owners and the top-level managers, supervising and running everyday business. The owners are interested in maximizing the value of their investments and profitability of the company in the long run, while the top managers may pursue personal gains of multiplying their own wealth, job security, prestige and, as a rule, maximizing short-term revenues they get bonus payments from. This contradiction of interests becomes obvious in one of the most important spheres of activity. taking strategic decisions of R&D expenditures, investments made in long-term innovation projects, or, in the area of business that reflects the investment activity of the company as a whole. This article presents an analysis of some feasible determinants of investment activity of Russian companies and stresses the importance of non-fundamental factors, such as: the top managers. share in company ownership capital, type of its major owners, and the size and transparency of its activity. The empiric analysis of these interconnections is made on the basis of regression methods using the data of 1437 Russian companies of the extractive industry, obtained with the help of Bureau van Dijk database. Within the framework of the analysis the author of the article shows that such fundamental factors as profit and the amount of financial leverage are not the exclusive determinants that influence the activity of the company, as there is a whole range of non-fundamental factors, in particular the CEO.s share in the company owner capital, property structure and the type of its major owners, that also have an impact on its investment policy. The obtained results allow to make some conclusions not only concerning the investment activity determinants of the Russian companies, but also to evaluate the efficiency of the CEO.s share of the company property as a motivating incentive of the Russian companies managers. work.