AUB ScholarWorks

The two sides of CEO option grants at the IPO

Show simple item record Chahine S. Goergen M.
dc.contributor.editor 2011 2017-09-07T07:51:24Z 2017-09-07T07:51:24Z 2011
dc.identifier 10.1016/j.jcorpfin.2011.04.005
dc.identifier.issn 09291199
dc.description.abstract This paper examines the impact of CEO IPO option grants on IPO underpricing. Contrary to Lowry and Murphy (2007) who do not find a relationship between the two, this paper finds such a relationship when board independence, the power of the CEO and venture capitalists (VCs) are taken into account. The results are threefold. First, powerful CEOs are able to reap substantial gains from IPO options, to the detriment of the shareholders. Second, young, powerful VCs use IPO option grants to bribe the CEO to agree to an early IPO which will leave more of the existing shareholders' money on the table. Finally, IPO options only work as a value-enhancing incentive in the presence of strong boards. © 2011 Elsevier B.V.
dc.format.extent Pages: (1116-1131)
dc.language English
dc.publisher AMSTERDAM
dc.relation.ispartof Publication Name: Journal of Corporate Finance; Publication Year: 2011; Volume: 17; no. 4; Pages: (1116-1131);
dc.source Scopus
dc.title The two sides of CEO option grants at the IPO
dc.type Article
dc.contributor.affiliation Chahine, S., The Suliman Olayan School of Business, American University of Beirut, Bliss Street, P.O. Box: 11-0236, Beirut, Lebanon
dc.contributor.affiliation Goergen, M., Cardiff Business School and European Corporate Governance Institute, Aberconway Building, Colum Drive, Cardiff, CF10 3EU, United Kingdom
dc.contributor.authorAddress Chahine, S.; The Suliman Olayan School of Business, American University of Beirut, Bliss Street, P.O. Box: 11-0236, Beirut, Lebanon; email:
dc.contributor.authorCorporate University: American University of Beirut; Faculty: Suliman S. Olayan School of Business; Department: School of Business;
dc.contributor.authorDepartment School of Business
dc.contributor.Faculty Suliman S. Olayan School of Business
dc.contributor.authorInitials Chahine, S
dc.contributor.authorInitials Goergen, M
dc.contributor.authorReprintAddress Chahine, S (reprint author), Amer Univ Beirut, Suliman Olayan Sch Business, Bliss St,POB 11-0236, Beirut, Lebanon.
dc.contributor.authorUniversity American University of Beirut
dc.description.cited Bach S. B., 2007, J HIGH TECHNOLOGY MA, V18, P31, DOI 10.1016-j.hitech.2007.03.002; BARRY CB, 1989, J FINANC, V44, P1099, DOI 10.2307-2328628; BEATTY RP, 1994, ADMIN SCI QUART, V39, P313, DOI 10.2307-2393238; Bebchuk LA, 2003, J ECON PERSPECT, V17, P71, DOI 10.1257-089533003769204362; BENVENISTE LM, 1989, J FINANC ECON, V24, P343, DOI 10.1016-0304-405X(89)90051-2; Bradley DJ, 2002, J FINANC QUANT ANAL, V37, P595, DOI 10.2307-3595013; CARTER R, 1990, J FINANC, V45, P1045, DOI 10.2307-2328714; Certo ST, 2001, STRATEGIC MANAGE J, V22, P641, DOI 10.1002-smj.182; Certo ST, 2003, ACAD MANAGE J, V46, P643; Coles JW, 2001, J MANAGE, V27, P23, DOI 10.1177-014920630102700102; Core JE, 1999, J FINANC ECON, V51, P371, DOI 10.1016-S0304-405X(98)00058-0; Daily C. M., 1993, ENTREP THEORY PRACT, V17, P65; Daily C. M., 1992, J SMALL BUS MANAGE, V30, P25; Daily CA, 2002, J MANAGE, V28, P387; Daily CM, 1997, J MANAGE, V23, P97, DOI 10.1016-S0149-2063(97)90039-8; Fama E., 1983, J LAW ECON, V26, P310; Filatotchev I, 2002, STRATEGIC MANAGE J, V23, P941, DOI 10.1002-smj.269; Finkelstein S., 1996, STRATEGIC LEADERSHIP; Fried VH, 1998, J BUS VENTURING, V13, P493, DOI 10.1016-S0883-9026(97)00062-1; Gompers PA, 1996, J FINANC ECON, V42, P133, DOI 10.1016-0304-405X(96)00874-4; Gompers PA, 2003, J FINANC, V58, P1355, DOI 10.1111-1540-6261.00570; Habib MA, 2001, REV FINANC STUD, V14, P433, DOI 10.1093-rfs-14.2.433; Hall BJ, 1998, Q J ECON, V113, P653, DOI 10.1162-003355398555702; HANLEY KW, 1993, J FINANC ECON, V34, P231, DOI 10.1016-0304-405X(93)90019-8; Hellmann T, 2002, J FINANC, V57, P169, DOI 10.1111-1540-6261.00419; Hermalin BE, 1998, AM ECON REV, V88, P96; Jain BA, 2008, J BUS VENTURING, V23, P21, DOI 10.1016-j.jbusvent.2005.11.001; JENSEN MC, 1986, AM ECON REV, V76, P323; JENSEN MC, 1976, J FINANC ECON, V3, P305, DOI 10.1016-0304-405X(76)90026-X; HARRISON JR, 1988, ADMIN SCI QUART, V33, P211, DOI 10.2307-2393056; Lee PM, 2004, J FINANC ECON, V73, P375, DOI 10.1016-j.jfineco.2003.09.003; LELAND HE, 1977, J FINANC, V32, P371, DOI 10.2307-2326770; Leone AJ, 2007, J ACCOUNTING RES, V45, P111, DOI 10.1111-j.1475-679X.2006.00229.x; Logue D. E., 1973, J FINANCIAL QUANTITA, V8, P91, DOI 10.2307-2329751; Loughran T, 2002, REV FINANC STUD, V15, P413, DOI 10.1093-rfs-15.2.413; Loughran T, 2004, FINANC MANAGE, V33, P5; Lowry M, 2007, J FINANC ECON, V85, P39, DOI 10.1016-j.jfineco.2006.05.006; Lowry M, 2004, J FINANC ECON, V71, P3, DOI 10.1016-S0304-405X(03)00205-8; MEHRAN H, 1995, J FINANC ECON, V38, P163, DOI 10.1016-0304-405X(94)00809-F; OSWALD SL, 1991, STRATEGIC MANAGE J, V12, P321, DOI 10.1002-smj.4250120407; Prevost A. K., 2002, J BUSINESS FINANCE A, V29, P731, DOI 10.1111-1468-5957.00448; Ryan HE, 2004, J FINANC ECON, V73, P497, DOI 10.1016-j.jfineco.2003.11.002; Sanders WG, 2001, ACAD MANAGE J, V44, P477; SHLEIFER A, 1989, J FINANC ECON, V25, P123, DOI 10.1016-0304-405X(89)90099-8; Shleifer A, 1997, J FINANC, V52, P737, DOI 10.2307-2329497; Tashakori M., 1980, MANAGEMENT SUCCESSIO; Wat L, 1983, STRATEGIES GOING PUB; WEISBACH MS, 1988, J FINANC ECON, V20, P431, DOI 10.1016-0304-405X(88)90053-0; Wiseman RM, 1998, ACAD MANAGE REV, V23, P133, DOI 10.2307-259103; Yermack D, 1997, J FINANC, V52, P449, DOI 10.2307-2329486
dc.description.citedCount 5
dc.description.citedTotWOSCount 2
dc.description.citedWOSCount 2
dc.format.extentCount 16
dc.identifier.scopusID 79960952110
dc.publisher.address PO BOX 211, 1000 AE AMSTERDAM, NETHERLANDS
dc.relation.ispartOfISOAbbr J. Corp. Financ.
dc.relation.ispartOfIssue 4
dc.relation.ispartofPubTitle Journal of Corporate Finance
dc.relation.ispartofPubTitleAbbr J. Corp. Financ.
dc.relation.ispartOfVolume 17
dc.source.ID WOS:000302841300020
dc.type.publication Journal
dc.subject.otherAuthKeyword Board independence
dc.subject.otherAuthKeyword CEO power
dc.subject.otherAuthKeyword Conflicts of interests
dc.subject.otherAuthKeyword Corporate governance
dc.subject.otherAuthKeyword Initial public offerings
dc.subject.otherAuthKeyword Stock options
dc.subject.otherAuthKeyword Underpricing
dc.subject.otherAuthKeyword Venture capital involvement
dc.subject.otherKeywordPlus INITIAL PUBLIC OFFERINGS
dc.subject.otherKeywordPlus EXECUTIVE-COMPENSATION
dc.subject.otherKeywordPlus CORPORATE GOVERNANCE
dc.subject.otherKeywordPlus FIRM PERFORMANCE
dc.subject.otherKeywordPlus STOCK-OPTIONS
dc.subject.otherKeywordPlus AGENCY COSTS
dc.subject.otherKeywordPlus OWNERSHIP
dc.subject.otherKeywordPlus MANAGEMENT
dc.subject.otherKeywordPlus DIRECTORS
dc.subject.otherKeywordPlus TURNOVER
dc.subject.otherWOS Business, Finance

Files in this item

Files Size Format View

There are no files associated with this item.

This item appears in the following Collection(s)

Show simple item record

Search AUB ScholarWorks


My Account