Journal of Corporate Finance Vol. 43 2017
Sales of private firms and the role of CEO compensation
Abstract
We analyze the relation of private firms' CEO compensation with the probability of sale of a firm and its valuation at the time of the sale. Specifically, we study whether equity-based remuneration is consistent with compensating the CEO for effort related to selling the private firm, or with compensating for the illiquidity of the equity-based compensation for private firms. Using a sample of large private firms with public filings, we find that CEOs of IPO and acquired private firms have higher total and equity-based compensation than CEOs of firms that remain private. We also show that CEO compensation is positively related to the valuation premium of IPOs versus acquired firms.
- DOI
- 10.1016/j.jcorpfin.2017.02.004
- Volume
- 43
- Pages
- 444-463
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref