MANAGERIAL INCENTIVES AT THE INITIAL PUBLIC OFFERING: AN EMPIRICAL ANALYSIS OF THE ALTERNATIVE INVESTMENT MARKET

Peter Roosenboom

A chapter in The Rise and Fall of Europe's New Stock Markets, 2004, pp 81-112 from Emerald Group Publishing Limited

Abstract: This chapter examines the determinants of managerial incentives at the time of an Initial Public Offering (IPO) on the Alternative Investment Market (AIM) of the London Stock Exchange. We identify a trade-off relation between board monitoring and incentives that is specific to CEOs. We also investigate the role of stock option grants and share transactions at the IPO. We find that the IPO may be used as a wealth diversification opportunity. We report that undiversified managers with large pre-IPO shareholdings receive smaller stock options grants and sell more shares in the IPO than more diversified managers.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:eme:afeczz:s1569-3732(04)10004-2

DOI: 10.1016/S1569-3732(04)10004-2

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