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Author: Phillip Leslie Publisher: ISBN: Category : Languages : en Pages : 42
Book Description
We analyze the differences between companies owned by private equity (PE) investors and similar public companies. We document that PE-owned companies use much stronger incentives for their top executives and have substantially higher debt levels. However, we find little evidence that PE-owned firms outperform public firms in profitability or operational efficiency. We also show that the compensation and debt differences between PE-owned companies and public companies disappear over a very short period (one to two years) after the PE-owned firm goes public. Our results raise questions about whether and how PE firms and the incentives they put in place create value.
Author: Phillip Leslie Publisher: ISBN: Category : Languages : en Pages : 42
Book Description
We analyze the differences between companies owned by private equity (PE) investors and similar public companies. We document that PE-owned companies use much stronger incentives for their top executives and have substantially higher debt levels. However, we find little evidence that PE-owned firms outperform public firms in profitability or operational efficiency. We also show that the compensation and debt differences between PE-owned companies and public companies disappear over a very short period (one to two years) after the PE-owned firm goes public. Our results raise questions about whether and how PE firms and the incentives they put in place create value.
Author: Phillip Leslie Publisher: ISBN: Category : Incentives in industry Languages : en Pages : 58
Book Description
We analyze the differences between companies owned by private equity (PE) investors and similar public companies. We document that PE-owned companies use much stronger incentives for their top executives and have substantially higher debt levels. However, we find little evidence that PE-owned firms outperform public firms in profitability or operational efficiency. We also show that the compensation and debt differences between PE-owned companies and public companies disappear over a very short period (one to two years) after the PE-owned firm goes public. Our results raise questions about whether and how PE firms and the incentives they put in place create value.
Author: Unyong Pyo Publisher: ISBN: Category : Languages : en Pages : 37
Book Description
I study changes in CEO compensation and pay-performance relations to examine how corporate spinoffs affect managerial incentive compensation and whether the changes in management compensation can explain the value enhancement and operating performance improvements that occur following spinoffs. Analyzing a sample of 124 non-taxable spinoffs during 1990-1997, I find that changes in managerial compensation are a significant motive for spinoffs. Changes in managerial incentives alone are consistent with the post-spinoff changes in operating performance, while changes in business focus are not. Spinoffs that are not accompanied by enhanced pay-performance relations do not improve operating performance even with increased business focus.
Author: Erik Stern Publisher: John Wiley & Sons ISBN: 1118160916 Category : Business & Economics Languages : en Pages : 475
Book Description
A groundbreaking book on building long-term wealth for stakeholders As creator of the Wealth Added Index (WAI), Stern Stewart's Erik Stern has become a beacon for creating shareholder value within the current storm of corporate malfeasance and poor performance. The Value Mindset shows readers how to develop this way of thinking by blending individual manager incentives with the proper corporate structure and the willingness to pursue value discipline over the long term. Filled with practical concepts that have proved themselves in the real world, this book shows readers how they can transform a company into an organization that can deliver value and returns to its shareholders. The Value Mindset helps readers develop this mindset-as well as implement it-by detailing the metrics that are necessary for any manager to measure and monitor value creation within the firm. Erik Stern (London, UK) is a Senior Vice President at Stern Stewart & Co., based in London. He has designed and implemented programs for companies in several industries in the United States and Europe. Mike Hutchinson (London, UK) is a Vice President at Stern Stewart & Co., based in London. He worked previously for the BBC and the Consumers' Association.
Author: Bertelsmann Stiftung Publisher: Verlag Bertelsmann Stiftung ISBN: 3867932646 Category : Business & Economics Languages : en Pages : 85
Book Description
How important is it to actually live a company's values? Values provide internal and external orientation and legitimize decisions and actions. They also send a signal that the company is a reliable cooperation partner. They can, therefore, help businesses lower their costs and improve their economic value creation. If lived values have such advantages, why is explicit-and effective-values management not as widespread as one might think? How do inconsistencies between propagated values and actual behavior arise, and what is the role that misled expectations among different stakeholders may play? Two case studies of internationally successful corporations illustrate the context and show how to leverage explicit values management.
Author: Rong Huang Publisher: ISBN: Category : Management science Languages : en Pages : 186
Book Description
The existing managerial accounting literature has investigated how firms incentivize and reward managers based on financial and non-financial measures of outcomes to motivate managers to take desired actions, such as expending resources on activities that enhance shareholder value. An alternative approach to induce managers' right action is to alleviate the penalty for input resource expenditure that increases shareholder value. In this study, I focus on the expenditure on selling, general and administrative (SG & A) activities, excluding R & D and advertising. I investigate whether the capital market and the executive labor market recognizes the long-term value generated by SG & A expenditure, how firms design incentive contracts to alleviate the penalty on value-enhancing SG & A expenditure and whether the incentives effectively lead to desired managerial actions.
Author: Kevin Kaiser Publisher: John Wiley & Sons ISBN: 1118510895 Category : Business & Economics Languages : en Pages : 322
Book Description
A groundbreaking guide to making profitable business decisions Do you wonder why your value initiatives aren't providing the payoff you'd hoped for? Could it be because you've been thinking about value all wrong? According to the authors of this groundbreaking guide, there's a very good chance that you have. Using examples from leading companies worldwide, they explain why every decision a company makes either creates value or detracts from it, and why, if they hope to survive and thrive in today's increasingly competitive global marketplace, company leaders must make value-creation the centrepiece of every business decision. Authors Kaiser and Young have dubbed this approach "Blue-Line Management," (BLM), and in this entertaining, highly accessible book, they delineate BLM principles and practices and show you how to implement them in your company. Explains why the failure to properly define and assess value often makes it difficult for the people who manage businesses to effect long-term success Offers guidelines for making the satisfaction of customer needs and wants—i.e. value creation—the driver of all business activities The authors are respected academics at INSEAD, the world's largest and most respected graduate business school, with campuses in Europe, Asia and the Middle East
Author: Jay Dial Publisher: ISBN: Category : Languages : en Pages :
Book Description
In 1991, defense contractor General Dynamics engaged a new management team which adopted an explicit corporate objective of creating shareholder value. The company tied executive compensation to shareholder wealth creation, and subsequently implemented a strategy that included downsizing, restructuring, and exit. Paying large executive cash bonuses amid layoffs ignited controversy. However, by 1993 shareholders realized gains approaching $4.5 billion, representing a dividend-reinvested return of 553%. The study shows how incentives assist in shaping strategy, illustrates the political costs and economic benefits of downsizing, and demonstrates that even firms in declining industries have substantial opportunities for value creation.
Author: Alexander Ljungqvist Publisher: ISBN: Category : Languages : en Pages : 40
Book Description
We examine the relation between firm value and managerial incentives in a sample of 1,307 publicly-held U.S. firms in 1992-1997. As predicted by Berle and Means (1932), we find that CEOs do not maximize firm value when they are not the residual claimant: our firms have higher Tobin's Q, the higher are CEO stockholdings. We also investigate the incentive properties of options and find that CEOs appear to hold too many options and that these options are insufficiently sensitive to firm risk. Our results do not appear to be driven by endogeneity biases. To assess the economic significance of the suboptimal provision of incentives, we compute an explicit performance benchmark which compares a firm's actual Tobin's Q to the Q* of a hypothetica fully-efficient firm having the same inputs and characteristics as the original firm. The Q of the average sample firm is around 12% lower than its Q*, equivalent to a $751 million reduction in its potential market value.
Author: Phillip Leslie
Author: Phillip Leslie
Author: Phillip Leslie
Author: Unyong Pyo
Author: J. Huang
Author: Erik Stern
Author: Bertelsmann Stiftung
Author: Rong Huang
Author: Kevin Kaiser
Author: Jay Dial
Author: Alexander Ljungqvist