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We examine how accounting-based compensation plans influence a firm's contracts with its creditors. After granting long-term accounting-based compensation plans (LTAPs) to CEOs, firms pay lower spreads and have fewer restrictive covenants in new bank loans. Mechanisms leading to lower borrowing...
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Motivated by the dual agency environment in founding family firms, we examine how family firms provide compensation incentives to nonfamily executives. Nonfamily executives receive weaker risk-taking incentives and pay-for-performance incentives when family ownership is high and when family...
Persistent link: https://www.econbiz.de/10012975764
We examine how incentive compensation for nonfamily executives in family firms differs from incentive compensation for executives in nonfamily firms. Nonfamily executives in family firms receive significantly less performance-based pay and equity-based pay. Family monitoring, risk aversion, and...
Persistent link: https://www.econbiz.de/10012857303
We use a hand-collected sample of 1,628 S&P 1500 firms and more than 12,000 executives to examine how family firms compensate nonfamily executives. Family firms comprise a large percentage of firms around the world, and most of their executives are not members of the founding family. Moreover,...
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The percentage of S&P 500 firms using multi-year accounting-based performance (MAP) incentives to CEOs increased from 16.5% in 1996 to 43.3% in 2008. The use and design of MAP incentives depend on the signal quality of accounting vs. stock performance, shareholder horizons, strategic...
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Family firms comprise more than one third of U.S. public firms. They differ significantly from widely-held firms in their promotion-based tournament environment and agency conflicts. These differences are likely to affect the design and efficacy of compensation incentives. However, most existing...
Persistent link: https://www.econbiz.de/10013492593
We find that contrary to popular belief, CEOs with long compensation duration do not make better long-term investment decisions. Using a comprehensive pay duration measure, we find that acquisitions conducted by CEOs with long compensation duration receive more negative announcement returns, and...
Persistent link: https://www.econbiz.de/10014245039