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postgraduate thesis: Managerial incentive contracts in newly listed firms
Title | Managerial incentive contracts in newly listed firms |
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Authors | |
Advisors | Advisor(s):Zhou, X |
Issue Date | 2011 |
Publisher | The 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 |
Abstract | Newly 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. |
Degree | Master of Philosophy |
Subject | Executives - Salaries, etc. Incentives in industry - Mathematical models. |
Dept/Program | Economics and Finance |
Persistent Identifier | http://hdl.handle.net/10722/174342 |
HKU Library Item ID | b4717906 |
DC Field | Value | Language |
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dc.contributor.advisor | Zhou, X | - |
dc.contributor.author | Chen, Jie | - |
dc.contributor.author | 陈洁 | - |
dc.date.issued | 2011 | - |
dc.identifier.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 | - |
dc.identifier.uri | http://hdl.handle.net/10722/174342 | - |
dc.description.abstract | Newly 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.language | eng | - |
dc.publisher | The University of Hong Kong (Pokfulam, Hong Kong) | - |
dc.relation.ispartof | HKU Theses Online (HKUTO) | - |
dc.rights | The author retains all proprietary rights, (such as patent rights) and the right to use in future works. | - |
dc.rights | This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License. | - |
dc.source.uri | http://hub.hku.hk/bib/B47179065 | - |
dc.subject.lcsh | Executives - Salaries, etc. | - |
dc.subject.lcsh | Incentives in industry - Mathematical models. | - |
dc.title | Managerial incentive contracts in newly listed firms | - |
dc.type | PG_Thesis | - |
dc.identifier.hkul | b4717906 | - |
dc.description.thesisname | Master of Philosophy | - |
dc.description.thesislevel | Master | - |
dc.description.thesisdiscipline | Economics and Finance | - |
dc.description.nature | published_or_final_version | - |
dc.identifier.doi | 10.5353/th_b4717906 | - |
dc.date.hkucongregation | 2012 | - |
dc.identifier.mmsid | 991032840889703414 | - |