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IPO Firm Executives, Compensation, and Selling

Author

Listed:
  • Jaemin Kim

    (San Diego State University)

  • Kuntara Pukthuanthong

    (San Diego State University)

Abstract

IPO firm executives are significant net sellers in the year immediately following the IPO year. Two significant variables affecting their sales are the number of stock options exercised during the year and the number of shares held at the end of the preceding year. Contrary to the findings of the previous studies, the number of stock options and the number of restricted stocks turn out to be insignificant. The evidence suggests that IPO executives sell mainly to realize a significant part of their undiversified wealth; however, they do not sell to explicitly hedge against stock option grants or to exploit potential overvaluation.

Suggested Citation

  • Jaemin Kim & Kuntara Pukthuanthong, 2006. "IPO Firm Executives, Compensation, and Selling," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 11(1), pages 3-21, Spring.
    • Handle: RePEc:pep:journl:v:11:y:2006:i:1:p:3-21
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    More about this item

    Keywords

    Compensation ; Executives ; Firm ; Firms ; IPO;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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