| « US: start up rate for new businesses declined in 2011 | Linklaters on "the European LBO debt mountain" » |
Board incentives and CEO turnover
03/18/12
09:14:38 am, by editor of MarketObservation.com 
, 154 words 
Categories: Performance Measurement, Corporate Governance, Market Characteristics
Dow, James, Board Incentives and CEO Turnover (March 16, 2012). Available at SSRN: http://ssrn.com/abstract=2024994
Abstract:
This paper shows that corporate boards will be reluctant to replace CEOs because firing sends a negative signal to the market and makes financing more expensive. This entrenchment result differs from existing literature because entrenchment is not a consequence of the CEO's own power, nor from collusion between board and CEO. Entrenchment is mitigated, but not eliminated, when the firm has more assets in place relative to investment opportunities. The paper also compares public (listed) and private equity ownership. Private ownership eliminates the costs of CEO entrenchment, but a stock market listing adds to firm value because the share price can guide investment decisions. I show that established firms with substantial existing assets compared to their investment opportunities will choose publicly listed status, while more rapidly growing firms will choose private ownership.
Keywords: Corporate Governance, CEO Turnover, Public versus Private Ownership
XML FeedsPRIVATE EQUITY NEWS:
ENTREPRENEUR'S BLOGS:
- Marc Andreessen's Blog (Founder Netscape Communications)
- Richard Branson's Blog
- The Enterprise Network (a Network of Silicon Valley Entrepreneurs)
- Feld Thoughts (from Brad Feld, Founder of Feld Technologies)
- Jonathan's Blog (Jonathan Schwartz, Sun Microsystems)
- Seth Goding (Author and Entrepreneur)
- Lee Hower (Part of the founding Team of LinkedIn
- Ryan McIntyre (Co-Founder Excite)
- Peter Rip (General Partner Crosslink Ventures)
- Peter Schüpbach NewBorn Blog
_________________________________________________________________________________FOUNDER HIGHLIGHTS AND FOUNDER FRUSTRA- TIONS:
VARIOUS LINKS:
- Altassets
- Angel's Corner
- Blogging Buy outs (AOL Money)
- China Venture News
- CMBOR Nottingham Univ.
- Fractals of Change
- From Wall Street to Main Street (Private Equity Blog of Congressman Tom Reynolds
- Innovations-Report
- PrivateEquityBlogger.com
- PrivateEquityFirms.com
- LPX-Private Equity Research
- Private Equity Intelligence
- Private Equity Week
- PWC Money Tree
- Silicon Valley News
- Silicon Valley Watcher
- Standard&Poors (LBO Debt)
- TechConfidential
- TechCrunch
- The Funded (Experiences with VC's)
- Think Equity Blog (Silicon Valley)
- Valleywag (Tech Gossip)
- VCCircle (India)
- Venture Capital Magazin (Germany)
- Venture Economics
_______________________________________________________________________________DEAL RUMORS/DEALS:
ASSOC./INSTITUTES:
- Asian VC Journal
- BVCA (UK)
- Private Equity Guide (Emory Univ.)
- European Corp. Gov. Institute
- EVCA (Europe)
- IVA (Israel)
- NVCA(USA)
- NVCA(India)
- Private Equity Valuation
- Private Equity Council (Washington DC)
- SECA (Switzerland)
- Yale Entrepreneurial Society
PRIVATE EQUITY STATISTICS:
- Dow Jones: Venture Capital Statistics
- Emory Univ: Private Equity Institute (incl. comprehensive Statistics Links)
- Venture Capital and Private Equity Industry (Baker Library Harvard)
_________________________________________________________________________________INTEREST RATES:
_________________________________________________________________________________WORKING PAPERS PRIVATE EQUITY AND VENTURE CAPITAL:
_________________________________________________________________________________DIRECTORIES:
