Founding Family Firms, CEO Incentive Pay, ...
Document type :
Compte-rendu et recension critique d'ouvrage
DOI :
Title :
Founding Family Firms, CEO Incentive Pay, and Dual Agency Problems
Author(s) :
Journal title :
Journal of Small Business Management
Pages :
1099-1125
Publisher :
Blackwell Publishing
Publication date :
2016-10
ISSN :
0047-2778
HAL domain(s) :
Sciences de l'Homme et Société/Gestion et management
English abstract : [en]
This paper contributes to the literature on agency theory by examining relations between family involvement and CEO compensation. Using a panel of 362 small U.S. listed firms, we analyze how founding families influence ...
Show more >This paper contributes to the literature on agency theory by examining relations between family involvement and CEO compensation. Using a panel of 362 small U.S. listed firms, we analyze how founding families influence firm performance through option portfolio price sensitivity. Consistent with the dual agency framework, we find that family firms have lower CEO incentive pay, which is further reduced by higher executive ownership. Interestingly, such incentive pay offsets the positive impact that families have on firm valuation. Collectively, our results show that, compared with nonfamily firms, lower incentive pay adopted by family firms due to lower agency costs mitigates the direct effect of family involvement on firm performance. Once accounting for CEO incentive pay, we do not observe performance differences between family and nonfamily firms.Show less >
Show more >This paper contributes to the literature on agency theory by examining relations between family involvement and CEO compensation. Using a panel of 362 small U.S. listed firms, we analyze how founding families influence firm performance through option portfolio price sensitivity. Consistent with the dual agency framework, we find that family firms have lower CEO incentive pay, which is further reduced by higher executive ownership. Interestingly, such incentive pay offsets the positive impact that families have on firm valuation. Collectively, our results show that, compared with nonfamily firms, lower incentive pay adopted by family firms due to lower agency costs mitigates the direct effect of family involvement on firm performance. Once accounting for CEO incentive pay, we do not observe performance differences between family and nonfamily firms.Show less >
Language :
Anglais
Popular science :
Non
Collections :
Source :
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