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Corporate governance when founders are directors

Li, Feng; Srinivasan, Suraj - In: Journal of Financial Economics 102 (2011) 2, pp. 454-469

&A) decisions in firms in which founders serve as a director with a nonfounder CEO (founder-director firms). We find that founder … CEOs in founder-director firms is higher and the level of pay is lower than that of other CEOs. CEO turnover sensitivity to …We examine chief executive officer (CEO) compensation, CEO retention policies, and mergers and acquisition (M …

Persistent link: https://www.econbiz.de/10010571671

CEO wage dynamics: Estimates from a learning model

Taylor, Lucian A. - In: Journal of Financial Economics 108 (2013) 1, pp. 79-98

The level of Chief Executive Officer (CEO) pay responds asymmetrically to good and bad news about the CEO's ability …. The average CEO captures approximately half of the surpluses from good news, implying CEOs and shareholders have roughly … equal bargaining power. In contrast, the average CEO bears none of the negative surplus from bad news, implying CEOs have …

Persistent link: https://www.econbiz.de/10011039267

Firm boundaries matter: Evidence from conglomerates and R&D activity

Seru, Amit - In: Journal of Financial Economics 111 (2014) 2, pp. 381-405

This paper examines the impact of the conglomerate form on the scale and novelty of corporate Research and Development (R&D) activity. I exploit a quasi-experiment involving failed mergers to generate exogenous variation in acquisition outcomes of target firms. A difference-in-differences...

Persistent link: https://www.econbiz.de/10010737667

Post-merger restructuring and the boundaries of the firm

Maksimovic, Vojislav; Phillips, Gordon; Prabhala, N.R. - In: Journal of Financial Economics 102 (2011) 2, pp. 317-343

We examine how firms redraw their boundaries after acquisitions using plant-level data. We find that there is extensive restructuring in a short period following mergers and full-firm acquisitions. Acquirers of full firms sell 27% and close 19% of the plants of target firms within three years of...

Persistent link: https://www.econbiz.de/10010571650

Executive stock options, differential risk-taking incentives, and firm value

Armstrong, Christopher S.; Vashishtha, Rahul - In: Journal of Financial Economics 104 (2012) 1, pp. 70-88

increase in the firm's systematic risk can be hedged by a CEO who can trade the market portfolio. Consistent with this …

Persistent link: https://www.econbiz.de/10010571660

Does shareholder coordination matter? Evidence from private placements

Chakraborty, Indraneel; Gantchev, Nickolay - In: Journal of Financial Economics 108 (2013) 1, pp. 213-230

We propose a new role for private investments in public equity (PIPEs) as a mechanism to reduce coordination frictions among existing equity holders. We establish a causal link between the coordination ability of incumbent shareholders and PIPE issuance. This result obtains even after...

Persistent link: https://www.econbiz.de/10010635938

The costs of shareholder activism: Evidence from a sequential decision model

Gantchev, Nickolay - In: Journal of Financial Economics 107 (2013) 3, pp. 610-631

This paper provides benchmarks for monitoring costs and evaluates the net returns to shareholder activism. I model activism as a sequential decision process consisting of demand negotiations, board representation, and proxy contest and estimate the costs of each activism stage. A campaign ending...

Persistent link: https://www.econbiz.de/10010635953

The evolution of capital structure and operating performance after leveraged buyouts: Evidence from U.S. corporate tax returns

Cohn, Jonathan B.; Mills, Lillian F.; Towery, Erin M. - In: Journal of Financial Economics 111 (2014) 2, pp. 469-494

This study uses corporate tax return data to examine the evolution of firms' financial structure and performance after leveraged buyouts (LBOs) for a comprehensive sample of 317 LBOs taking place between 1995 and 2007. We find little evidence of operating improvements subsequent to an LBO,...

Persistent link: https://www.econbiz.de/10010737669

Freedom of choice between unitary and two-tier boards: An empirical analysis

Belot, François; Ginglinger, Edith; Slovin, Myron B.; … - In: Journal of Financial Economics 112 (2014) 3, pp. 364-385

We examine board structure in France, which since 1966 has allowed firms the freedom to choose between unitary and two-tier boards. We analyze how this choice relates to characteristics of the firm and its environment. Firms with severe asymmetric information tend to opt for unitary boards;...

Persistent link: https://www.econbiz.de/10010776499

The sources of value destruction in acquisitions by entrenched managers

Harford, Jarrad; Humphery-Jenner, Mark; Powell, Ronan - In: Journal of Financial Economics 106 (2012) 2, pp. 247-261

Prior work has established that entrenched managers make value-decreasing acquisitions. In this study, we determine how they destroy that value. Overall, we find that value destruction by entrenched managers comes from a combination of factors. First, they disproportionately avoid private...

Persistent link: https://www.econbiz.de/10010593843

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