Founder Management And The Market For Corporate Control For IPO Firms

The role CEO (Chief Executive Officer, normally the general manager or president of a company) plays in a company, agency theory, stewardship theory and corporate control have long been the focus of academic study, as well as the topic of heated debate and discussion in the real world. According to existing corporate governance literature, in the market for corporate control, the potential loss of corporate control will impel CEO to reject the merger, even if face value increment was acquired. From the perspective of agency theory, some scholars take CEO reject the merger for hinder the acquisition to suit their own interests so as to protect their personal right of control, or strive for the golden parachute bargaining chip as well as the employment contract after the merger. Other scholars believe that CEO’s adoption of reject the merger aims to increase acquisition premium account for the shareholders’equity, since the price of the target company by required price may not reach the level of shareholders or the CEO expected premium. The thesis argues that if in the study can carry on the effective division to the target company and the CEO, different acts of different CEOs when corporate control market changes can be fully explained. Significant differences exist between founder CEO and non-founder CEO toward the entrepreneurial firms emotionally, which can be adequately explained by some ideas from stewardship theories. The stewardship theory believes that the motivation disagreement between CEO and the shareholders does not necessarily exist. CEOs, who are never opportunistic shirkers, want badly to become good stewards for corporate assets.At present, the Chinese IPO market is hit by a merger wave after a long suspension period of one whole year in 2013, when new share could not come into the market. As the topic of acquisition was much discussed, the reflection on corporate control changes draws the attention from business circles and academia again. When received an offer, whether CEO can accept the offer, whether the price accept the offer can truly express the value of the company, and whether founder CEO and non-founder CEO can perform different behavioral characteristics during the occurrence of these major events, are problems that no scholars have already explored systematically and thoroughly.The research object of this thesis is Shenzhen gem public listed companies in China. Compared to main board market, these companies are mostly Growth higher start-up companies and is in high-tech or emerging industries. Confined to immature the governance structure and limited scale of company, excellent non-founder CEO tend to decline these companies as their first job choice, and examples of the founder taking the role of CEO in these companies abound. Therefore, the research on these companies during major events can better probe into the behavioral pattern of founder-CEO.Taking In 2009-2012 in Shenzhen gem listed companies in our country all eligible by m&a events as the sample, through the discussion of The stewardship theory, agency theory and corporate control market and the right type, by empirical study, event study, logic regression and Adjust the regression analysis, we can come to the following conclusion:Firstly, to guarantee self-interest, founder CEO and non-founder CEO When will receive an offer in the boycott of mergers and acquisitions, although it may sacrifice the benefits of shareholders. However, as the founder of the entrepreneur, founder CEO show more resistance than non-founder CEO, for losing the right of control means more loss to the former than the latter. Secondly, in the companies where the founder takes the role of CEO The target of the listed company, the possibility of agency conflict is smaller, and founders act more like loyal stewards toward their companies, who often wish their companies to achieve better acquisition premium. Again, the thesis also analyze the impact of the CEO’s right on the relationship between the founder-CEO and acquisition premium. Lastly, the thesis analyzes the hypothesis that is theoretically true but lack empirical verification.The contribution of this thesis lies in two points:first, through effective differentiation of founder CEO and non-founder CEO, the thesis provides realistic situation related to For the complementary and application of agency theory and stewardship theory provides a CEO types; Second, its practical significance is the ability to guide A takeover bid, that is, if the CEO of the target company is the founder, the traditional way to promote M&a contract through Golden parachutes may not apply and the founder CEO wishes to win more acquisition premium for the company.