A SIGNALING MODEL OF CONTROL BLOCK SALES BY ENTREPRENEURS
In this paper, we present a model in which higher-valued managers signal their value by voluntarily submitting to shareholder oversight. If a manager is willing to sell enough stock to release voting control, he is perceived to be of higher quality than if he had defensively maintained control. The implication of the model is that voluntary/control sales by insiders can be good news for the firm. This is consistent with the share-price increases that follow the deaths of entrenched managers.