Managerial Incentives and Value Creation: Evidence from Private Equity / Phillip Leslie, Paul Oyer.

Format:

Book

Author/Creator:

Leslie, Phillip.

Contributor:

National Bureau of Economic Research.

Oyer, Paul.

Series:

Working Paper Series (National Bureau of Economic Research) no. w14331.

NBER working paper series no. w14331

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Managerial Incentives and Value Creation

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2008.

Summary:

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.

Notes:

Print version record

September 2008.