Managerial Incentives and Value Creation
Author | : Phillip Leslie |
Publisher | : |
Total Pages | : 42 |
Release | : 2014 |
ISBN-10 | : OCLC:1290713831 |
ISBN-13 | : |
Rating | : 4/5 (31 Downloads) |
Download or read book Managerial Incentives and Value Creation written by Phillip Leslie and published by . This book was released on 2014 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the differences between companies owned by private equity (PE) investors and similar public companies. We document that PE-owned companies use much stronger incentives for their top executives and have substantially higher debt levels. However, we find little evidence that PE-owned firms outperform public firms in profitability or operational efficiency. We also show that the compensation and debt differences between PE-owned companies and public companies disappear over a very short period (one to two years) after the PE-owned firm goes public. Our results raise questions about whether and how PE firms and the incentives they put in place create value.