Keywords
Governance, Executive Compensation, CEO Turnover, Internal Labor Market
Abstract
This dissertation is composed by two essays that explore corporate governance issues in S&P firms. The first essay examines changes in corporate governance after a firm gets added to the S&P 500 index? Using firms added from 1994 to 2007, this paper examines how governance mechanisms change for these firms. Specifically, I look at both the overall governance and details on how each mechanism changes. I find that governance improves after being added to the index. Controlling for firm size, leverage, prior firm performance, and growth opportunities, the market reacts positively to governance improvements as a whole. In addition, changes in governance are positively associated with changes in operating performance. In the second essay, the departure of a CEO often raises questions about who will replace him/her. This study examines the homogeneity/heterogeneity nature of the internal labor market using a novel measure, a heterogeneity index, which captures the concentration of executive compensation levels. I find that a more homogeneous internal labor market is associated with (1) a greater likelihood of an internal replacement, (2) a higher probability of a CEO turnover, and (3) a bigger tournament prize. In addition, the negative performance-turnover relationship is strengthened by a more homogeneous internal labor market. The heterogeneity index seems to proxy for internal labor market competition.
Notes
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Graduation Date
2010
Advisor
Frye, Melissa
Degree
Doctor of Philosophy (Ph.D.)
College
College of Business Administration
Department
Finance
Degree Program
Business Administration
Format
application/pdf
Identifier
CFE0003258
URL
http://purl.fcla.edu/fcla/etd/CFE0003258
Language
English
Release Date
August 2010
Length of Campus-only Access
None
Access Status
Doctoral Dissertation (Open Access)
STARS Citation
Tan, Tih Koon, "Essays On Corporate Governance" (2010). Electronic Theses and Dissertations. 4259.
https://stars.library.ucf.edu/etd/4259