Location of Repository

Executive Incentive Schemes in Initial Public Offerings: The Effects of Multiple-Agency Conflicts and Corporate Governance

By Deborah Allcock and Igor Filatotchev


Combining a behavioral agency perspective with research on multiple-agency conflicts, this article examines factors affecting the implementation of equity-based incentive schemes in initial public offerings (IPOs). With a unique sample of U.K. IPO companies between the years 1998 and 2002, it shows that conditional (performance-related) incentive schemes are negatively associated with share ownership and board power of the IPO’s founding directors. However, the retained ownership of venture capital firms is positively associated with the probability of conditional incentive schemes. Board independence weakly effects on the toughness of executive compensation. The article’s interesting findings suggest a number of avenues for a future analysis of the governance development process in threshold firms

Topics: HJ
Publisher: Sage
Year: 2009
OAI identifier: oai:eprints.hud.ac.uk:4160

Suggested articles



  1. (1998). A behavioral agency model of risk taking. doi
  2. (1980). Agency problems and the theory of the firm. doi
  3. (2003). An ethical perspective on CEO compensation. doi
  4. (2002). Board composition, share ownership and ’underpricing’ of U.K. IPO firms. doi
  5. (1998). Board control, remuneration committees and top management compensation. doi
  6. (1989). Boards of directors and corporate financial performance: A review and integrative model. doi
  7. (1995). Boards of directors and substitution effects of alternative governance mechanisms. doi
  8. (2003). Capital Association. doi
  9. (1997). CEO and board chair roles held jointly or separately: Much ado about nothing? doi
  10. (2001). CEO compensation, option incentives, and information disclosure. doi
  11. (2000). CEO founder status and firm financial performance. doi
  12. (1999). CEO Involvement in the selection of new board members: An empirical analysis. doi
  13. (1999). Collaboration in the boardroom: Behavioral and performance consequences of CEO board social ties. doi
  14. (1992). Compensation, organizational strategy, and firm performance. doi
  15. (2002). Conflicting voices: The effects of institutional ownership heterogenity and internal governance on corporate innovation strategies. doi
  16. (1999). Cooperative or Controlling? The Effects of CEO-Board Relations and the Content of Interlocks on the Formation of Joint Ventures. doi
  17. (1985). Corporate performance and managerial remuneration: An empirical study. doi
  18. (2006). Effects of executive characteristics and venture capital involvement on board composition and share ownership in IPO firms. doi
  19. (2000). Entrepreneurship and the evolution of angel financial networks. doi
  20. (1990). Executive Incentive Schemes in Initial Public Offerings: The Effects of Multiple-Agency Conflicts doi
  21. (2003). Exploring the agency consequences of ownership dispersion among the directors of private family firms. doi
  22. (1992). Financial performance of founder-managed versus professionally managed small corporations.
  23. (2003). Giving money to get money: How CEO stock options and CEO equity enhance IPO valuations. doi
  24. (1998). Going public and the ownership structure of the firm. doi
  25. (1989). Going public the impact of insider’s holdings on the price of initial public offering. doi
  26. (2000). Human resources in initial public offering firms: Do venture capitalists make a difference? Entrepreneurship Theory and Practice,
  27. (1994). Impact of agency risks and task uncertainty on venture capitalist-CEO interaction doi
  28. (1992). In order to grow, must the founder go: A comparison of performance between founder and non-founder managed high-growth manufacturing firms. doi
  29. (2003). Influencing initial public offering investors with prestige: Signaling with board structures. doi
  30. (2003). Interest and business ethics: Some lessons of the recent corporate scandals.
  31. (1992). Management incentive compensation and shareholder value. doi
  32. (2008). Managerial agents watching other agents: Multiple agency conflicts regarding underpricing in IPO firms. doi
  33. (1997). Managerial compensation, strategy and firm performance. doi
  34. (1994). Managerial incentives, monitoring and risk bearing: a study of executive compensation, ownership, and board structure in initial public offerings. doi
  35. (1990). Matching compensation and organizational strategies. doi
  36. (2003). Meta-analysis of financial performance and equity: fusion or confusion? doi
  37. (1979). Moral hazard and observability. doi
  38. (1997). Myth or reality? The long-run underperformance of initial public offerings: Evidence from venture and non venture capital-backed companies. doi
  39. (2004). New lists: Fundamentals and survival rates. doi
  40. (1999). New thinking on how to link executive pay with performance.
  41. (1990). On the efficiency of internal and external corporate control mechanisms. doi
  42. (1999). On the measurements of board composition: Poor consistency and a serious mismatch of theory and operationalization. doi
  43. (1997). Ownership and operating performance of companies that go public. doi
  44. (1990). Performance pay and top management incentives. doi
  45. (1998). Post IPO directors’ sales and reissuing activity: an empirical test of IPO signalling models. doi
  46. (1979). Prospect theory: An analysis of decision under risk. doi
  47. (1986). Rational choice and the framing of decisions. doi
  48. (1981). Selecting strategies that create shareholder value. doi
  49. (1983). Separation of ownership and control. doi
  50. (1972). Size and composition of corporate boards of directors: The organization and its environment. doi
  51. (1999). Strategists on the board. doi
  52. (2003). Testing a model of reasoned risk-taking: Governance, the experience of principals and agents, and global strategy in high-technology IPO firms. doi
  53. (1998). The choice of stock ownership structure: Agency costs, monitoring, and the decision to go public. doi
  54. (1987). The costs of going public. doi
  55. (2003). The determinants of board structure at the initial public offering. doi
  56. (1993). The disappearing relationship between directors pay and corporate performance. doi
  57. (1998). The effect of institutional investors on the level and mix of CEO compensation. doi
  58. (2006). The firm’s strategic dynamics and corporate governance life-cycle. doi
  59. (2002). The implications of strategy and social context for the relationship between top management team heterogeneity and firm performance. doi
  60. (1999). The lifecycle of initial public offering firms. doi
  61. (1994). The pricing of initial public offerings: the test of adverseselection and signaling theories. doi
  62. (1998). The relationship between boards of directors and initial public offerngs in the biotechnology industry.
  63. (1997). The role of risk in executive compensation. doi
  64. (2001). The strategic context of external network ties: Examining the impact of director appointments on board involvement in strategic decisionmaking. doi
  65. (2000). The structure of executive compensation contracts: UK evidence. Long Range Planning, doi
  66. (2002). The tenuous trade-off between risk and incentives. doi
  67. (1976). Theory of the firm: managerial behavior, agency costs and ownership structure. doi
  68. (1994). Top pay, company performance, and corporate governance. doi
  69. (1996). Total board remuneration and company performance. doi
  70. (1996). Towards a model of risk in declining organizations: An empirical examination of risk, performance and decline. doi
  71. (1997). Underpricing, ownership and control in initial public offerings of equity securities in the U.K. doi
  72. (2003). Underpricing, stock allocation, ownership structure and post listing liquidity of newly listed firms. doi
  73. (2002). Understanding the Dynamics of New Venture Top Management Teams: Cohesion, Conflict, and New Venture Performance. doi
  74. (1998). Venture capital and the structure of capital markets: Banks versus stock markets. doi
  75. (1991). Venture capitalist certification in initial public offerings. doi
  76. (2001). Wealth and the effects of founder management among IPO-stage new ventures. doi
  77. (2001). When will boards influence strategy? inclination × power = strategic change. doi
  78. (1995). Who shall govern? CEO board power, demographic similarity and new director selection. doi
  79. (1998). Why do companies go public? An empirical analysis. doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.