CEO compensation in venture-backed firms
(2011) In Journal of Business Venturing 26(4). p.391-411- Abstract
- We hypothesize that because fast-growing young companies must raise money in private capital markets that contain significant financing frictions, the CEOs of such firms will be compensated for successful fundraising. Using a sample of 1585 private venture-backed U.S. firms, we find that the cash pay of entrepreneur-CEOs is increasing in both the quantity and quality of financing secured and is more sensitive to successful fundraising the more challenging and difficult is the fundraising task. Successful fundraising also increases the gap between the pay of CEOs and other executives. Finally, we show that while VC financing dilutes the CEO's fractional equity ownership, it increases the dollar value of that ownership.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/3629062
- author
- Bengtsson, Ola LU and Hand, John
- organization
- publishing date
- 2011
- type
- Contribution to specialist publication or newspaper
- publication status
- published
- subject
- keywords
- Finance, Venture Capital, Compensation
- categories
- Popular Science
- in
- Journal of Business Venturing
- volume
- 26
- issue
- 4
- pages
- 391 - 411
- publisher
- Elsevier
- external identifiers
-
- scopus:79955590389
- ISSN
- 0883-9026
- language
- English
- LU publication?
- yes
- id
- 3fd639b2-6e31-4f35-a6f3-b49856c2a966 (old id 3629062)
- alternative location
- http://www.sciencedirect.com/science/article/pii/S0883902609001207
- date added to LUP
- 2016-04-01 10:45:31
- date last changed
- 2022-01-26 02:15:21
@misc{3fd639b2-6e31-4f35-a6f3-b49856c2a966,
abstract = {{We hypothesize that because fast-growing young companies must raise money in private capital markets that contain significant financing frictions, the CEOs of such firms will be compensated for successful fundraising. Using a sample of 1585 private venture-backed U.S. firms, we find that the cash pay of entrepreneur-CEOs is increasing in both the quantity and quality of financing secured and is more sensitive to successful fundraising the more challenging and difficult is the fundraising task. Successful fundraising also increases the gap between the pay of CEOs and other executives. Finally, we show that while VC financing dilutes the CEO's fractional equity ownership, it increases the dollar value of that ownership.}},
author = {{Bengtsson, Ola and Hand, John}},
issn = {{0883-9026}},
keywords = {{Finance; Venture Capital; Compensation}},
language = {{eng}},
number = {{4}},
pages = {{391--411}},
publisher = {{Elsevier}},
series = {{Journal of Business Venturing}},
title = {{CEO compensation in venture-backed firms}},
url = {{http://www.sciencedirect.com/science/article/pii/S0883902609001207}},
volume = {{26}},
year = {{2011}},
}