The effects of company risk, founders' characteristics and corporate governance on executive incentive schemes in UK initial public offerings

• Author

Association of British Insurers. 2002. Executive compensation and share based remuneration:
Guidelines for share incentive schemes. London: ABI.
Baker, M., & Gompers, P. A. 2003. The determinants of board structure at the initial public
offering. Journal of Law and Economics, 46(2): 569-598.
Balkin, D. B., & Gomez-Mejia, L. R. 1990. Matching compensation and organizational strategies.
Strategic Management Journal, 1(2): 153-169.
Barkema, H., Geroski, P., & Schwalbach, J. 1997. Managerial compensation, strategy and firm
performance: An introduction. International Journal of Industrial Organization, 15(4): 413-
416.
Baysinger, B., & Hoskisson, R. E. 1990. The composition of boards of directors and strategic
control: effects on corporate strategy. Academy of Management Review, 15(1): 72-87.
Beatty, R. P., & Zajac, E. J. 1994. Managerial incentives, monitoring and risk bearing: a study of
executive compensation, ownership, and board structure in initial public offerings.
Administrative Science Quarterly, 39(2): 313-335.
Brennan, M. J., & Franks, J. 1997. Underpricing, ownership and control in initial public offerings
of equity securities in the U.K. Journal of Financial Economics, 45(3): 391-413.
Cannella, A. A., Frasier, D. R., & Lee, S. 1995. Firm failure and managerial labor markets:
Evidence from Texas banking. Journal of Financial Economics, 38(2): 185-210.
Carpenter, M. A. 2002. The implications of strategy and social context for the relationship between
top management team heterogeneity and firm performance. Strategic Management Journal,
23: 275-284.
Carpenter, M. A., Pollock, T. G., & Leary, M. M. 2003. Testing a model of reasoned risk-taking:
Governance, the experience of principals and agents, and global strategy in high-technology
IPO firms. Strategic Management Journal, 24(9): 803-820.
35
Carpenter, M. A., & Westphal , J. D. 2001. The Strategic Context of External Network Ties:
Examining the Impact of Director Appointments on Board Involvement in Strategic
Decision-making. Academy of Management Journal, 44: 639-660.
Certo, S. T. 2003. Influencing initial public offering investors with prestige: Signaling with board
structures. Academy of Management Review, 28(3): 432-446.
Certo, S. T., Covin, J. G., Daily, C. M., & Dalton, D. R. 2001. Wealth and the effects of founder
management among IPO-stage new ventures. Strategic Management Journal, 22(6-7): 641-
658.
Certo, S. T., Daily, C. M., Cannella, A. A., & Dalton, D. R. 2003. Giving money to get money:
How CEO stock options and CEO equity enhance IPO valuations. The Academy of
Management Journal, 46(5): 643-664.
Combined Code on Corporate Governance (The). 2006. London: Financial Reporting Council.
Conyon, M., & Leech, D. 1994. Top pay, company performance, and corporate governance. Oxford
bulletin of Economics and Statistics, 56(3): 229-247.
Conyon, M. J., & Peck, S. I. 1998. Board control, remuneration committees and top management
compensation. The Academy of Management Journal, 41: 146-157.
Conyon, M. J., Peck, S. I., Read, L., & Sadler, G. V. 2000. The structure of executive
compensation contracts: UK evidence. Long Range Planning, 33(4): 478-503.
Conyon, M. J., Peck, S. I., & Sadler, G. 2000. Econometric modelling of UK executive
compensation. Managerial Finance, 26(9): 3-20.
Conyon, M. J., & Sadler, G. V. 2001. CEO compensation, option incentives, and information
disclosure. Review of Financial Economics, 10(3): 251-277.
Coughlan, A. T., & Schmidt, R. M. 1985. Executive compensation, management turnover, and firm
performance: An empirical investigation. Journal of Accounting and Economics, 7(1-3): 43-
66.
36
Cyr, L., Johnson, D., & Welbourne, T. 2000. Human resources in initial public offering firms: Do
venture capitalists make a difference? Entrepreneurship Theory and Practice, 25(1): 77-91.
Daily, C. M., & Dalton, D. R. 1992. Financial performance of founder-managed versus
professionally managed small corporations. Journal of Small Business Management, 2: 25-
34.
Daily, C. M., & Dalton, D. R. 1997. CEO and board chair roles held jointly or separately: Much
ado about nothing? Academy of Management Executive, 11(3): 11-20.
Daily, C. M., Dalton, D. R., & Cannella, A. A. 2003. Corporate governance: Decades of dialogue
and data. Academy of Management Review, 28(3): 371-382.
Daily, C. M., Johnson, J. L., & Dalton, D. R. 1999. On the Measurements of Board Composition:
Poor Consistency and a Serious Mismatch of Theory and Operationalization. Decision
Sciences, 30: 83-106.
Dalton, D. R., Daily, C. M., Certo, S. T., & Roengpitya, R. 2003. Meta-analysis of financial
performance and equity: fusion or confusion? . Academy of Management Journal, 46(1): 13-
26.
David, P., Kochhar, R., & Levitas, E. 1998. The effect of institutional investors on the level and
mix of CEO compensation. The Academy of Management Journal, 41(2): 200-208.
Ensley, M. D., Pearson, A. W., & Amason, A. C. 2002. Understanding the Dynamics of New
Venture Top Management Teams: Cohesion, Conflict, and New Venture Performance.
Journal of Business Venturing, 17(4): 365-386.
Espenlaub, S., & Tonks, I. 1998. Post IPO directors' sales and reissuing activity: an empirical test
of IPO signalling models. Journal of Business, Finance and Accounting, 25(9-10): 1037-
1079.
Fama, E. F. 1980. Agency problems and the theory of the firm. Journal of Political Economy,
88(8): 288-307.
37
Fama, E. F., & Jensen, M. C. 1983. Separation of ownership and control. Journal of Law and
Economics, 26: 301-325.
Filatotchev, I. 2006. Effects of executive characteristics and venture capital involvement on board
composition and share ownership in IPO firms. British Journal of Management, 17(1): 75-92.
Filatotchev, I., & Bishop, K. 2002. Board composition, share ownership and 'underpricing' of U.K.
IPO firms. Strategic Management Journal, 23(10): 941-955.
Filatotchev, I., Jackson, G., Gospel, H., & Allcock, D. 2007. Identifying the key drivers of 'good'
corporate governance and the appropriateness of policy responses. London: Department of
Trade and Industry.
Filatotchev, I., Toms, S., & Wright, M. 2006. The firm’s strategic dynamics and corporate
governance life-cycle. International Journal of Managerial Finance, 2(4): 256-279.
Finkle, T. 1998. The relationship between boards of directors and initial public offerngs in the
biotechnology industry. Entrepreneurship, Theory and Practice, 22(3): 5-30.
Gillian, S. L., & Starks, L. T. 2000. Corporate governance proposals and shareholder activism: the
role of institutional investors. Journal of Financial Economics, 57(2): 275-305.
Gilson, S. C. 1989. Management turnover and financial distress. Journal of Financial Economics,
25(2): 241-262.
Golden, B. R., & Zajac, E. J. 2001. When will boards influence strategy? inclination × power =
strategic change. Strategic Management Journal, 22(12): 1087-1111.
Gomez-Mejia, L. R., & Balkin, D. B. 1992. Compensation, organizational strategy, and firm
performance. Cincinnati, Ohio: South-Western Publishing Co.
Gomez-Mejia, L. R., & Welbourne, T. M. 1988. Compensation strategy: An overview and future
steps. Human Resource Planning, 11(3): 173-189.
Gray, S. R., & Cannella, A. A. 1997. The role of risk in executive compensation. Journal of
Management, 23(4): 517-540.
38
Greenbury, S. R. 1995. Director's remuneration report of a study group chaired by Sir Richard
Greenbury (Greenbury Report). London: Gee Publishing Ltd.
Gregg, P., Machin, S., & Symanski, S. 1993. The disappearing relationship between directors pay
and corporate performance. British Journal of Industrial Relations, 31(1): 1-9.
Gujarati, D. N. 2003. Basic Econometrics (4th ed.). New York: McGraw-Hill.
Gulati, R., & Westphal, J. 1999. Cooperative or Controlling? The Effects of CEO-Board Relations
and the Content of Interlocks on the Formation of Joint Ventures. Administrative Science
Quarterly, 44: 473-506.
Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. 1998. Multivariate Data Analysis (5th
ed.). New Jersey: Prentice-Hall.
Hambrick, D., & Jackson, E. 2000. Outside Directors with Stake: The Linchpin in Improving
Governance. California Management Review, 42(4): 108-127.
Hampel, R. 1998a. Committee on corporate governance: final report (Hampel Committee Report).
London: Gee Publishing.
Hampel, R. 1998b. Committee on corporate governance: the combined code. London: Gee
Publishing.
Holmstrom, B. 1979. Moral hazard and observability. Bell Journal of Economics, 10(1): 74-91.
Hoskisson, R. E., Hitt, M. A., Johnson, R. A., & Grossman, W. 2002. Conflicting voices: The
effects of institutional ownership heterogenity and internal governance on corporate
innovation strategies. Academy of Management Journal, 45(4): 697-716.
Jain, B. A., & Kini, O. 1999. The lifecycle of initial public offering firms. Journal of Business,
Finance and Accounting, 26(9 & 10): 1281-1317.
Jayraman, N., Khorana, A., & Nelling, E. 2000. CEO founder status and firm financial
performance. Strategic Management Journal, 21(12): 1215-1224.
39
Jensen, M., & Murphy, K. J. 1990. Performance pay and top management incentives. Journal of
Political Economy, 98(2): 225-264.
Jensen, M. C., & Meckling, W. H. 1976. Theory of the firm: managerial behavior, agency costs and
ownership structure. Journal of Financial Economics, 3(4): 305-360.
London Stock Exchange. 2002. A Practical Guide to Listing. London: London Stock Exchange plc.
Main, B. G. M., Bruce, A., & Buck, T. 1996. Total board remuneration and company performance.
The Economic Journal, 106(439): 1627-1644.
McBain, M. L., & Krause, D. S. 1989. Going public the impact of insider's holdings on the price of
initial public offering. Journal of Business Venturing, 4(6): 419-428.
McNulty, T., & Pettigrew, A. 1999. Strategists on the board. Organization Studies, 20(1): 47-74.
Mello, A. S., & Parsons, J. E. 1998. Going public and the ownership structure of the firm. Journal
of Financial Economics, 49(1): 79-109.
Michaely, R., & Shaw, W. H. 1994. The pricing of initial public offerings: the test of adverseselection
and signaling theories. Review of Financial Studies, 7(2): 279-319.
Mikkelson, W. H., Partch, M. M., & Shah, K. 1997. Ownership and operating performance of
companies that go public. Journal of Financial Economics, 44(3): 281-316.
Murphy, K. 1985. Corporate performance and managerial remuneration: An empirical study.
Journal of Accounting and Economics, 7(1-3): 11-42.
Pagano, M., Panetta, F., & Zingales, L. 1998. Why do companies go public? An empirical
analysis. Journal of Finance, 53(1): 27-64.
Pagano, M., & Röell, A. 1998. The choice of stock ownership structure: Agency costs, monitoring,
and the decision to go public. Quarterly Journal of Economics, 113: 187-225.
Pettigrew, A., & McNulty , T. 1995. Power and influence in and around the boardroom. Human
Relations, 48: 845- 873.
40
Pfeffer, J. 1972. Size and composition of corporate boards of directors: The organization and its
environment. Administrative Science Quarterly, 17(2): 218-228.
Pham, P., Kalev, P., & Steen, A. 2003. Underpricing, stock allocation, ownership structure and post
listing liquidity of newly listed firms. Journal of Banking & Finance, 27: 919-947.
Pye, A. 2001. A Study in Studying Corporate Boards Over Time: Looking Backwards to Move
Forwards. British Journal of Management, 12: 33-45.
Rappaport, A. 1981. Selecting strategies that create shareholder value. Harvard Business Review,
60(3): 139-149.
Rappaport, A. 1999. New thinking on how to link executive pay with performance. Harvard
Business Review, 77(2): 91-101.
Rediker, K., & Seth, A. 1995. Boards of directors and substitution effects of alternative governance
mechanisms. Strategic Management Journal, 16: 85-99.
Ritter, J. R. 1987. The costs of going public. Journal of Financial Economics, 19(2): 269-281.
Sanders, W. G., & Boivie, S. 2004. Sorting things out: Valuation of new firms in uncertain
markets. Strategic Management Journal, 25(2): 167-186.
Sapienza, H. J., & Gupta, A. K. 1994. Impact of agency risks and task uncertainty on venture
capitalist-CEO interaction Academy of Management Journal, 37(6): 1618-1632.
Schulze, W., Lubatkin, M., & Dino, R. 2003. Exploring the agency consequences of ownership
dispersion among the directors of private family firms. Academy of Management Journal, 46:
217-229.
Shivdasani, A., & Yermack, D. 1999. CEO Involvement in the selection of new board members:
An empirical analysis. Journal of Finance, 54(5): 1829 -1853.
Steier, L., & Greenwood, R. 2000. Entrepreneurship and the evolution of angel financial networks.
Organization Studies, 21(1): 163-192.
The Directors' Remuneration Report Regulations. 2002. SI 2002/1986: 1-27. London: HMSO.
41
Walsh, J. P., & Steward, J. K. 1990. On the efficiency of internal and external corporate control
mechanisms. Academy of Management Review, 15(3): 421-458.
Westphal, J. D. 1999. Collaboration in the boardroom: Behavioral and performance consequences
of CEO board social ties. Academy of Management Journal, 42: 7-24.
Westphal, J. D., & Zajac, E. J. 1995. Who shall govern? CEO board power, demographic similarity
and new director selection. Administrative Science Quarterly, 40(1): 60-83.
Zahra, S., & Pearce, J. 1989. Boards of directors and corporate financial performance: A review
and integrative model. Journal of Management, 15(2): 291-272.