An examination of the benefits for privately‐held and mutual insurers’ CEOs following an IPO
Abstract
This study examines compensation changes among top executives of formerly privately held stock insurers and mutual insurers at the time around an initial public offering. This study explains how CEO compensation changes following an IPO differ between these two types of insurers owing to their differing agency characteristics. The results also show that CEOs’ benefits increase materially following an IPO. The authors find evidence that reduced ownership retention by managers increases agency costs and CEOs of mutual insurers exploit their positions and increase their reward at the expense of policyholders.
Keywords
Citation
Napompech, K., Kroll, M. and Shelor, R. (2002), "An examination of the benefits for privately‐held and mutual insurers’ CEOs following an IPO", Managerial Finance, Vol. 28 No. 12, pp. 63-81. https://doi.org/10.1108/03074350210768211
Publisher
:MCB UP Ltd
Copyright © 2002, MCB UP Limited