Recent research has suggested that interest alignment, i.e., the degree to which members of an organization are motivated to behave in line with organizational goals, is a source of competitive advantage that can generate rents for the firm (Gottschlag and Zollo, 2007). Drawing on agency theory, this dissertation tests whether the interest alignment premise manifests itself differently in the strategic behavior of family-controlled firms when compared to their nonfamily peers. In particular, for firms in the S&P 500, I evaluate the results of two important strategic policies; mergers and acquisitions, as well as CEO compensation practices. In studying acquisitions made by family and nonfamily firms in the S&P 500 index from 1992-2006, I find that family firms are more careful when embarking on actions leading to mergers than non-family firms, as evidenced by their selection of smaller targets and targets who are in related businesses. I also find that there is a preponderance of cash purchases by family firms that does not vary with market movements and that completion times for merger transactions are shorter than for non family firms. The care and concern with which family-controlled firms choose their "mates" translates into higher stock returns when compared with non-family firms. Overall, I believe that family-controlled firms derive value from their merger and acquisition strategy. With regard to CEO compensation practices, I find that family firms provide strong incentives to the CEO for superior performance but pay significantly lower than nonfamily firms in terms of both salary and stock-based pay. The pay-for-performance sensitivity between annual stock returns and total compensation is significantly greater for family firms in general, and for family CEOs when compared with compensation of CEOs in nonfamily firms. The pay-for-performance sensitivity is in turn positively related to firm performance, suggesting that firms with greater pay-for-performance sensitivity (family controlled firms) also perform better. The analyses in my thesis thus illustrate that family-controlled firms and non-family firms in the S&P 500 differ in their strategic decision-making. It would be fair to say that family firms have longer investment horizons and give deliberate thought to expending resources whether for acquisitions or for CEO pay, and may suffer lower agency costs than nonfamily firms due to family governance (and public monitoring) which may lead to their relative superior performance. This dissertation finds that each acquisition made by a family controlled firm generates an extra return of 0.50% when compared with a nonfamily firm, and family controlled firms earn 0.50% every year directly attributable to pay-for-performance sensitivity. The study thus underlines and reiterates the importance of instilling the long-term view in the management of all firms, lowering agency costs, and aligning the interests of managers with those of stockholders for superior financial performance / Ph. D.

Titel: Flygfärdighet i företagsledningen? - En kvantitativ studie om ägarstrukturer i svenska börsnoterade bolag   Författare: Maximilian Zuif & Theodor Svedberg   Handledare: Urban Österlund   Bakgrund: I dagens samhälle har fenomenet pilotskolan blivit ett allt hetare samtalsämne inom aktieanalys. Teorier på ämnet menar på att en VD som innehar en betydande andel aktier i det egna bolaget kommer att ha ett större intresse av att bolaget presterar så bra som möjligt. Samtidigt kan tidigare studier anses oense om huruvida ett stort insiderägande hos VD:n har en positiv eller negativ effekt på dess prestation. Ett vanligt nyckeltal som används av investerare för att bedöma hur verksamheten presterar är EBITDA, vilket mäter ett företags vinst före räntor, skatter, ned- och avskrivningar. Under kortare perioder kan det förekomma en stor diskrepans mellan ett bolags aktiepris och hur den underliggande verksamheten presterar. Däremot brukar aktiepriset vara tätt sammanlänkat med bolagets prestation sett över längre tidsperioder.   Syfte: Syftet med studien är att undersöka om det finns något samband mellan VD-ägande och EBITDA-utveckling, samt huruvida det finns något samband mellan EBITDA-utveckling och aktiekurs hos svenska börsnoterade bolag.   Metod: I studien har en kvantitativ metod och en deduktiv forskningsansats använts för att samla in och bearbeta data om bolag listade på Nasdaq OMX Stockholm Mid och Large Cap. Den kvantitativa forskningsmetoden bygger på data kring bolagens ägarstruktur och finansiella prestation för åren 2017 till 2023. Utifrån data har multipla regressionsmodeller skapats för att kunna besvara studiens två forskningsfrågor.   Resultat: Studiens resultat tyder på att det finns ett signifikant positivt samband mellan EBITDA-tillväxt och aktiekursutveckling. Vidare uppvisade den multipla regressionen ett signifikant negativt samband mellan omsättningstillväxt och aktiekursutveckling. Regressionsmodellen som utformades för att undersöka sambandet mellan VD-ägande och EBITDA-utveckling klarade inte Ramsey’s RESET-test, varpå modellen inte kunde anses adekvat. Således hittades i studien inget statistiskt säkerställt samband mellan VD-ägande och EBITDA-utveckling.   Nyckelord: Pilotskolan, VD-ägande, EBITDA, Avkastning, Nasdaq OMX Stockholm Mid Cap, Nasdaq OMX Stockholm Large Cap / Title: Flight skills in the business management? – A quantitative study on ownership structures in Swedish listed firms   Authors: Maximilian Zuif & Theodor Svedberg   Supervisor: Urban Österlund   Background: In today’s society, the pilot school phenomenon has become an increasingly hot topic of conversation in stock analysis. Relevant theories suggests that a CEO who holds a significant part of the shares in his own company will have a greater interest in the company performing as well as possible. At the same time, previous studies can be considered divided on whether a large insider ownership of the CEO has a positive or negative effect on its performance. A common ratio used by investors to assess how the business is performing is EBITDA, which measures a company's earnings before interest, taxes, depreciation and amortization. For shorter periods, there may be a large discrepancy between a company’s share price and how the underlying business is performing. In contrast, the share price is usually closely linked to the company’s performance when looking over longer periods of time.   Aim: The aim of this study is to examine if a relationship exists between CEO stock ownership and growth in EBITDA, as well as whether any relationship exists between growth in EBITDA and development in stock price for Swedish listed firms.   Method: In the study, a quantitative method and a deductive research approach have been used to collect and process data on companies listed on Nasdaq OMX Stockholm Mid and Large Cap. The quantitative research method is based on data about the companies’ ownership structure and financial performance for the years 2017 to 2023. Based on the data, multiple regression models have been created to be able to answer the two research questions in the study.   Results: The results of the study indicate that a significant positive relationship exists between growth in EBITDA and development in stock price. Furthermore, the multiple regression performed in the study showed a significant negative relationship between growth in revenue and stock price development. The regression model designed to examine the relationship between CEO stock ownership and development in EBITDA did not pass Ramsey’s RESET-test, whereupon the model could not be considered adequate. Thus, no statistically proven relationship was found between CEO stock ownership and development in EBITDA.   Keywords: CEO stock ownership, EBITDA, return on investment, Nasdaq OMX Stockholm Mid Cap, Nasdaq OMX Stockholm Large Cap