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postgraduate thesis: Managerial incentive contracts in newly listed firms

TitleManagerial incentive contracts in newly listed firms
Authors
Advisors
Advisor(s):Zhou, X
Issue Date2011
PublisherThe University of Hong Kong (Pokfulam, Hong Kong)
Citation
Chen, J. [陈洁]. (2011). Managerial incentive contracts in newly listed firms. (Thesis). University of Hong Kong, Pokfulam, Hong Kong SAR. Retrieved from http://dx.doi.org/10.5353/th_b4717906
AbstractNewly listed firms have a short history of stock value, and may initially not rely on stock price information in incentive contracting as much as seasoned firms. In this thesis, I examine managerial incentive contracts in newly listed firms by comparing CEO compensation between IPO firms and seasoned firms. For IPOs listed on NYSE from 1993 to 2001, a matching sample of seasoned firms was obtained according to criteria in industry, size and book-to-market ratio. By examining the multi-dimensions of CEO incentives, including cash compensation, option grants, stock ownership, and dismissal for the first six years after listing, I document significant differences between IPOs and seasoned firms. I find that while the sensitivity of short-term incentive pay to shareholder return is lower in IPOs than in seasoned firms, long-term incentives from CEO stock ownership are significantly more important in newly listed firms. Moreover, although CEO turnover in an IPO firm is lower, it depends on both stock-price return and accounting performance. These IPO-seasoned differences diminish over time and disappear in three to five years. My findings suggest that to motivate the manager of a newly listed firm, the board avoids short-term uncertainty associated with new stocks while emphasizing the role of shareholder value in the long run.
DegreeMaster of Philosophy
SubjectExecutives - Salaries, etc.
Incentives in industry - Mathematical models.
Dept/ProgramEconomics and Finance

 

DC FieldValueLanguage
dc.contributor.advisorZhou, X-
dc.contributor.authorChen, Jie-
dc.contributor.author陈洁-
dc.date.issued2011-
dc.identifier.citationChen, J. [陈洁]. (2011). Managerial incentive contracts in newly listed firms. (Thesis). University of Hong Kong, Pokfulam, Hong Kong SAR. Retrieved from http://dx.doi.org/10.5353/th_b4717906-
dc.description.abstractNewly listed firms have a short history of stock value, and may initially not rely on stock price information in incentive contracting as much as seasoned firms. In this thesis, I examine managerial incentive contracts in newly listed firms by comparing CEO compensation between IPO firms and seasoned firms. For IPOs listed on NYSE from 1993 to 2001, a matching sample of seasoned firms was obtained according to criteria in industry, size and book-to-market ratio. By examining the multi-dimensions of CEO incentives, including cash compensation, option grants, stock ownership, and dismissal for the first six years after listing, I document significant differences between IPOs and seasoned firms. I find that while the sensitivity of short-term incentive pay to shareholder return is lower in IPOs than in seasoned firms, long-term incentives from CEO stock ownership are significantly more important in newly listed firms. Moreover, although CEO turnover in an IPO firm is lower, it depends on both stock-price return and accounting performance. These IPO-seasoned differences diminish over time and disappear in three to five years. My findings suggest that to motivate the manager of a newly listed firm, the board avoids short-term uncertainty associated with new stocks while emphasizing the role of shareholder value in the long run.-
dc.languageeng-
dc.publisherThe University of Hong Kong (Pokfulam, Hong Kong)-
dc.relation.ispartofHKU Theses Online (HKUTO)-
dc.rightsThe author retains all proprietary rights, (such as patent rights) and the right to use in future works.-
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.source.urihttp://hub.hku.hk/bib/B47179065-
dc.subject.lcshExecutives - Salaries, etc.-
dc.subject.lcshIncentives in industry - Mathematical models.-
dc.titleManagerial incentive contracts in newly listed firms-
dc.typePG_Thesis-
dc.identifier.hkulb4717906-
dc.description.thesisnameMaster of Philosophy-
dc.description.thesislevelMaster-
dc.description.thesisdisciplineEconomics and Finance-
dc.description.naturepublished_or_final_version-
dc.identifier.doi10.5353/th_b4717906-
dc.date.hkucongregation2012-

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