|
|
|
|
||||
|
||||
Winning by Losing: How CEO Wealth Changes Around Seasoned Equity OfferingsYi JiangCalifornia State University, Fullerton; University of Iowa - Department of Finance Yilei ZhangUniversity of North Dakota - College of Business & Public Administration July 13, 2008 Abstract: We develop a methodology to decompose CEO wealth into three major components: pure price effect, board compensation effect, and CEO's own portfolio adjustment effect. Using this decomposition we examine how CEO wealth changes around SEOs. We find that in contrast to shareholders, CEOs actually gain. We document that CEO wealth gains are predominantly due to increased pay following SEOs. We also find that CEO wealth gains are more pronounced for CEOs who experience a larger price decline in their existing equity holdings. Additional results suggest that CEO wealth gains are highly associated with CEO power, market condition changes and CEO's opportunity cost of undertaking SEOs. In comparison, CEOs are not rewarded for undertaking debt issuance.
Number of Pages in PDF File: 47 Keywords: Executive compensation, Wealth decomposition, SEO, Bond issuance JEL Classification: G32, G34, J33 working papers seriesDate posted: July 21, 2008 ; Last revised: August 10, 2008Suggested CitationContact Information
|
|
||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo7 in 0.547 seconds
