Corporate governance when founders are directors

Journal of Financial Economics

Volumn 102, Issue 2, 2011, Pages 454-469

  Li, Feng ^a   Srinivasan, Suraj ^b  

^a UNIVERSITY OF MICHIGAN   (United States)

^b HARVARD BUSINESS SCHOOL   (United States)

Author keywords

Boards of Directors; CEO compensation; CEO turnover; Corporate governance; Founder

Indexed keywords

EID: 80052771278     PISSN: 0304405X     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jfineco.2010.11.006     Document Type: Article

References (60)

1. Adams R.B., Almeida H., Ferreira D. Understanding the relationship between founder-CEOs and firm performance. Journal of Empirical Finance 2009, 16:136-150.
2. Adams R.B., Ferreira D. Do directors perform for pay?. Journal of Accounting and Economics 2008, 46:154-171.
3. Aggarwal R.K., Samwick A.A. Executive compensation, strategic competition, and relative performance evaluation: theory and evidence. Journal of Finance 1999, 54:1999-2043.
4. Aggarwal R.K., Samwick A.A. The other side of the trade-off: the impact of risk on executive compensation. Journal of Political Economy 1999, 107:65-105.
5. Ai C., Norton E. Interaction terms in logit and probit models. Economic Letters 2003, 80:123-129.
6. Anderson R., Mansi S., Reeb D.M. Founding-family ownership and the agency cost of debt. Journal of Financial Economics 2003, 68:263-285.
7. Anderson R., Reeb D.M. Founding family ownership and firm performance: evidence from the S&P 500. Journal of Finance 2003, 58:1301-1329.
8. Anderson R., Reeb D.M. Board composition: balancing family influence in S&P 500 firms. Administrative Sciences Quarterly 2004, 49:209-237.
9. Asquith P., Bruner R.F., Mullins D.W. The gains to bidding firms from merger. Journal of Financial Economics 1983, 11:121-139.
10. Baker, G.P., Hall, B.J., 2000. CEO Incentives and Firm Size. Working Paper 6868. National Bureau of Economic Research, Cambridge, MA.
11. Betton S., Eckbo B.E., Thorburn K.S. Corporate takeovers. Handbook of Corporate Finance: Empirical Corporate Finance 2008, 291-430. Elsevier/North-Holland, Amsterdam. B.E. Eckbo (Ed.).
12. Bergstresser D., Philippon T. CEO incentives and earnings management. Journal of Financial Economics 2006, 80:511-529.
13. Brickley J.A. Empirical research on CEO turnover and firm performance: a discussion. Journal of Accounting and Economics 2003, 36:227-233.
14. Cai J., Garner J.L., Walkling R.A. Electing directors. Journal of Finance 2009, 64(5):2389-2421.
15. Core J., Guay W. The use of equity grants to manage optimal equity incentive levels. Journal of Accounting and Economics 1999, 28:151-184.
16. Core, J., Guay, W., 2001. The Other Side of the Trade-off: A Comment. Unpublished Working Paper. University of Pennsylvania, Wharton School, Philadelphia, PA.
17. Core J., Guay W. Estimating the value of employee stock option portfolios and their sensitivities to price and volatility. Journal of Accounting Research 2002, 40:613-630.
18. Core, J., Guay, W., 2002b. The Other Side of the Trade-off: The Impact of Risk on Executive Compensation: A Revised Comment. ssrn.com/abstract=292955, doi:10.2139/ssrn.292955.
19. Core J., Holthausen R.W., Larcker D.F. Corporate governance, chief executive officer compensation, and firm performance. Journal of Financial Economics 1999, 51:371-406.
20. Cremers, M., Bebchuk, L.A., Peyer, U.C., 2007. CEO Centrality. Harvard Law and Economics Discussion Paper No. 601. Available at SSRN: http://ssrn.com/abstract=1030107.
21. Crocker K.J., Slemrod J. The economics of earnings manipulation and managerial compensation. Rand Journal of Economics 2007, 38(3):698-713.
22. Demsetz H., Lehn K. The structure of corporate ownership: causes and consequences. Journal of Political Economy 1985, 93:1155-1177.
23. Evans J.H., Nagarajan N.J., Schloetzer J.D. CEO turnover and retention light: retaining former CEOs on the board. Journal of Accounting Research 2010, 48(5):1015-1047.
24. Fahlenbrach R. Founder-CEOs, investment decisions, and stock market performance. Journal of Financial and Quantitative Analysis 2009, 44(2):439-466.
25. Faleye, O., 2003. Does one hat fit all? The case of corporate leadership structure. ssrn.com/abstract=394980.
26. Fama E.F., Jensen M.C. Agency problems and residual claims. Journal of Law and Economics 1983, 26:327-349.
27. Fee C.E., Hadlock C.J. Raids, rewards, and reputations in the market for managerial talent. Review of Financial Studies 2003, 16(4):1315-1357.
28. Fich E.M., Shivadasani A. Are busy boards effective monitors?. Journal of Finance 2006, 61(2):689-724.
29. Fich E.M., Shivdasani A. Financial fraud, director reputation, and shareholder wealth. Journal of Financial Economics 2007, 86:306-336.
30. Field L.C., Karpoff J. Takeover defenses of IPO firms. Journal of Finance 2002, 57(5):1857-1889.
31. Frydman, C., Jenter, D., 2010. CEO Compensation. Working Paper 77. Stanford University, Rock Center for Corporate Governance, Stanford, CA. ssrn.com/abstract=1582232.
32. Fuller K., Netter J., Stegemoller M. What do returns to acquiring firms tell us: evidence from firms that make many acquisitions. Journal of Finance 2002, 57:1763-1793.
33. Garvey G.T., Milbourn T.T. Incentive compensation when executives can hedge the market: evidence of relative performance evaluation in the cross section. Journal of Finance 2003, 58(4):1557-1581.
34. Gibbons R., Murphy K.J. Optimal incentive contracts in the presence of career concerns: theory and evidence. Journal of Political Economy 1992, 100:468-505.
35. Goldman E., Slezak S.L. An equilibrium model of incentive contracts in the presence of information manipulation. Journal of Financial Economics 2006, 80(3):603-626.
36. Gompers P.A., Ishii J.L., Metrick A. Corporate governance and equity prices. Quarterly Journal of Economics 2003, 118(1):107-155.
37. Grinstein, Y., Tolkowsky, E., 2004. The Role of the Board of Directors in the Capital Budgeting Process-Evidence from S&P 500 Firms. ssrn.com/abstract=625141.
38. Hall B.J., Leibman J.B. Are CEOs really paid like bureaucrats?. Quarterly Journal of Economics 1998, 113(3):653-691.
39. Huson M., Malatesta P., Parrino R. Managerial succession and firm performance. Journal of Financial Economics 2004, 74:237-275.
40. James H. Owner as manager, extended horizons and the family firm. International Journal of Economics and Business 1999, 6:41-56.
41. Jensen M.C. The modern industrial revolution, exit, and the failure of internal control systems. Journal of Finance 1993, 48(3):831-880.
42. Jensen M.C., Murphy K.J. Performance pay and top-management incentives. Journal of Political Economy 1990, 98(2):225-264.
43. Jenter, D.C., Kanaan, F., 2008. CEO turnover and relative performance evaluation. Research Paper 4594-06. MIT Sloan School of Management, Cambridge, MA. ssrn.com/abstract=885531.
44. Jin L. CEO compensation, diversification, and incentives. Journal of Financial Economics 2002, 66:29-63.
45. Loughran T., Ritter J.R. Why has IPO underpricing changed over time?. Financial Management 2004, 33(3):5-37.
46. Milbourn T. CEO reputation and stock-based compensation. Journal of Financial Economics 2003, 68:233-262.
47. Moeller S.B., Schlingemann F.P., Stulz R.M. Firm size and the gains from acquisitions. Journal of Financial Economics 2004, 73:201-228.
48. Murphy K.J. Executive compensation. Handbook of Labor Economics 3b 1999, 2485-2563. Elsevier Science, North-Holland, Amsterdam. O. Ashenfelter, D. Card (Eds.).
49. Norton E., Wang H., Ai C. Computing interaction effects and standard errors in logit and probit models. Stata Journal 2004, 4:103-116.
50. Oyer P., Schaefer S. Why do some firms give stock options to all employees? An empirical examination of alternative theories. Journal of Financial Economics 2005, 76:99-133.
51. Palia, D., Ravid, A., 2002. The Role of Founders in Large Companies: Entrenchment or Valuable Human Capital? Unpublished Working Paper. Rutgers University, Newark, NJ.
52. Palia D., Ravid A., Wang C.J. Founders versus nonfounders in large companies: financial incentives and the call for regulation. Journal of Regulatory Economics 2008, 33:55-56.
53. Parrino R. CEO turnover and outside succession: a cross-sectional analysis. Journal of Financial Economics 1997, 46:165-197.
54. Pérez-González F. Inherited control and firm performance. American Economic Review 2006, 96:1559-1588.
55. Prendergast C. The tenuous trade-off between risk and incentives. Journal of Political Economy 2002, 110(5):1071-1102.
56. Shleifer A., Vishny R.W. A survey of corporate governance. Journal of Finance 1997, 52:737-783.
57. Srinivasan S. Consequences of financial reporting failure for outside directors: evidence from accounting restatements. Journal of Accounting Research 2005, 43:291-334.
58. Villalonga B., Amit R. How do family ownership, control, and management affect firm value?. Journal of Financial Economics 2006, 80(2):385-417.
59. Villalonga B., Amit R. How are US family firms controlled?. Review of Financial Studies 2009, 22(8):3047-3091.
60. Weisbach M.S. Outside directors and CEO turnover. Journal of Financial Economics 1988, 20:431-460.