Skip to main content
main-content
Top

Hint

Swipe to navigate through the articles of this issue

16-11-2019 | Non-Conference Submission | Issue 1/2020 Open Access

Review of Accounting Studies 1/2020

Inducement grants, hiring announcements, and adverse selection for new CEOs

Journal:
Review of Accounting Studies > Issue 1/2020
Authors:
Brian Cadman, Richard Carrizosa, Xiaoxia Peng
Important notes
The original online version of this article was revised due to a retrospective Open Access order.
A correction to this article is available online at https://​doi.​org/​10.​1007/​s11142-020-09577-2.

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Abstract

We examine how adverse selection problems when hiring new external CEOs affect contractual features of inducement grants. Focusing on the sensitivity of inducement grants to the new CEO announcement return ($Sensitivity), we find that firms provide inducement grants that are more sensitive to the new CEO announcement return when information asymmetry about the new CEO is more severe and the costs of adverse selection problems are higher. We also find a positive relation between the market reaction to the appointment and $Sensitivity. We consider factors that reduce information asymmetry (e.g., engaging a search firm or appointing internal CEOs) and find they are associated with lower sensitivity of the inducement grant to the announcement.

Please log in to get access to this content

To get access to this content you need the following product:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 69.000 Bücher
  • über 500 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Umwelt
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Testen Sie jetzt 30 Tage kostenlos.

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 58.000 Bücher
  • über 300 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Testen Sie jetzt 30 Tage kostenlos.

Literature
About this article

Other articles of this Issue 1/2020

Review of Accounting Studies 1/2020 Go to the issue

Premium Partner

    Image Credits