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Gli amministratori delegati e le aziende sono sempre più sotto i riflettori dei media e del pubblico in generale. Ad oggi pochi studi hanno compreso quali variabili influenzano l’attivismo degli azionisti, così come quali variabili portano a far sì che gli stakeholder aziendali reagiscano negativamente di fronte a determinate caratteristiche aziendali. La tesi intende quindi approfondire tre fenomeni: le reazioni degli individui nei confronti del compenso percepito dal CEO e nei confronti della performance aziendale; l’attivismo degli azionisti nei confronti del linguaggio utilizzato dal CEO; l’attivismo degli azionisti nei confronti delle politiche di CSR adottate dalle aziende. Il primo capitolo si intitola “Eccessività e merito del compenso del CEO” e mira a comprendere l’effetto che il compenso del CEO e la performance aziendale possono avere sulle percezioni degli stakeholder. Il secondo capitolo si intitola “Attivismo degli azionisti e linguaggio del CEO”. Lo studio dimostra che un linguaggio in cui è frequente l’utilizzo del simbolo “shareholder-value” porta gli azionisti a valutare il CEO in modo più favorevole e a ridurre il loro attivismo nei confronti dell'azienda. Il terzo capitolo si intitola “L’effetto delle politiche di CSR sull’attivismo degli azionisti” e mira a comprendere l’effetto delle politiche di CSR sulla probabilità che un'impresa venga presa di mira da azionisti attivisti. / CEOs and corporations are under the spotlight and relatively little is known about what influences shareholder activism and stakeholder reaction towards specific CEO-level and firm-level characteristics. This thesis aims at investigating three phenomena: individuals’ reactions towards CEO pay and firm performance; shareholder activism towards CEO’s use of language; shareholder activism towards CSR policies. The first chapter is entitled “CEO Compensation Excessiveness and Deservingness” and aims at investigating the effect of CEO pay and corporate performance on individuals’ negative reaction. The second chapter is entitled “Shareholder Activism and CEO’s Use of Language”. Drawing on signaling theory and the symbolic management perspective, the chapter shows that a CEO’s use of language that is congruent with the prevailing governance model of shareholder value maximization leads shareholders to evaluate the CEO more favorably and to reduce their activism toward the firm. The third chapter is entitled “The Effect of CSR Policies on Activist Shareholders” and aims at investigating whether CSR policies attract activist shareholders. The chapter theorizes and examines the effect of CSR policies on the probability of a firm being targeted by activist shareholders, as well as the moderating effect of firm positive reputation in the relationship between CSR policies and shareholder activism.

My dissertation consists of two chapters exploring several aspects of empirical corporate finance with a special focus on founder CEOs and family firms. Chapter 1 focuses on the impact of founder CEO leadership on firm value in publicly listed U.S. firms. Previous research on how founder CEOs affect firm value shows mixed results. Using a natural experiment whereby I measure the impact of the sudden deaths of CEOs during the period 1964–2018, I document that stock prices increase by 1.56% upon founder CEOs’ deaths and decrease by 2.89% upon professional CEOs’ deaths. Next, I develop a novel measure of managerial private benefits and discuss several new insights. First, I document that the positive stock price reactions to the sudden deaths of founder CEOs are mainly driven by the fact that founder CEOs extract two times greater private benefits relative to professional CEOs. Second, segregating private benefits into two parts – nepotism and non-nepotism – I find that investors react to both types of private benefits. Third, investor reactions are more pronounced for tunneling-related disclosed private benefits than for investment-related non-disclosed private benefits. Fourth, investors reactions are more pronounced for private benefits related to underinvestment than for private benefits related to overinvestment. Overall, my paper highlights the impact of CEO leadership styles on shareholder wealth. Chapter 2 examines significant family ownership in publicly listed U.S. firms. Instead of holding a diversified portfolio, family owners, such as the Waltons of Walmart, hold large fractions of their wealth in a single stock. To explain this decision, we build a unique model of ambiguity aversion wherein the family’s information advantage in their firm allows them to more accurately estimate value-at-risk in tail events relative to the diversified portfolio. Using an index of macroeconomic uncertainty, we find a strong, negative relation between the uncertainty beta and both family ownership and involvement. Also consistent with our predictions, we document that families with high absolute wealth or risk aversion are unlikely to exit the firm. Our analysis provides an explanation for a family owner’s decision to hold a concentrated stake in a single firm in countries with well-developed financial markets and legal regimes. / Business Administration/Finance

The size of the remuneration paid to CEOs is a continuously debated area in society. In times of inflation, where the real wages are decreasing at the same time as the remuneration to CEOs are increasing, the phenomenon becomes more relevant. Is the remuneration paid to CEOs at a reasonable level? Are they getting paid in accordance with the performance of the company they manage? The purpose of this study is to see if there is a pay-performance relation in the most traded companies in Scandinavia. To fulfill the purpose, analyses were performed to test the relationship between CEOs remuneration and the financial performance of the firm they manage for the years 2018 to 2021. The sample consists of 71 companies that are listed on one of the indexes OMXS30, OMXC25 and OBX in Scandinavia. 28 out of the companies are Swedish, 23 Danish and 20 are Norwegian. Both the total and variable CEO remuneration in the companies were manually gathered from remuneration and annual reports and then tested against the financial performance measures Return on Assets and Total Investment Return. As the CEO is in an agency position where the shareholders work as the principals, an agency problem is present. To reduce the agency problem, incentives for the CEO to work in the shareholders’ best interest are important. One way of doing that is to design the CEOs remuneration package so it has a relation to the performance of the company. Originating from the Agency Theory, the Managerial Power and the Optimal Contracting theories try to explain the way these packages are designed. The Optimal Contracting theory explain that the design is to align the participants interest in order to maximize both parties’ outcomes, while the Managerial Power theory is explained as top executives possesses substantial power in the company, it enables them to extract higher remuneration than what is optimal for the shareholders. The empirical result showed a significant positive relationship between variable remuneration and both performance measures along with total remuneration and Total Invest Return. A positive relationship was found between total remuneration and Return on Assets, but not statistically significant. Based on the results a conclusion can be drawn that there is a pay-performance relation in companies listed on the main indexes in Scandinavia, and that the Optimal Contracting theory better explain the way remuneration packages are designed.

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This paper investigates the effect of CEO compensation structure on the risk-taking of the firms in Sweden. In addition, the study examines whether the gender of the CEO plays a role in this relationship. In the recent decades, there has been a drastic increase in the use of variable pay in the CEO compensation package, motivated by the alignment of risk preferences between shareholders and CEOs. However, researchers have failed to reach a unanimous conclusion regarding the effect of variable pay on risk-taking. This study examines the companies listed on Nasdaq OMX Stockholm, comprising 643 observations during the three-year period from 2017- 2019. The results from this study find no positive relationship between compensation and risk-taking as predicted by the agency theory. The study results confirm no or negative relation, depending on the risk measure; indicating that increased CEO variable compensation reduces firm risk through less financial leverage and no significant relationship is found between variable pay and volatility of stock return. Moreover, when examining the gender aspect of risk-taking, no significant difference is found and gender has no impact in the effect of compensation structure on risk-taking.

When a publicly traded company changes CEOs, the stock market will react in either a positive or negative way. This thesis uses multiple regression analysis to investigate which characteristics of the personal profile of the new CEO that might evoke positive or negative reactions from the stock market, both on one-day and one-year time perspectives. The mathematical results are compared to professional opinions regarding what defines an optimal CEO. The inefficiency of the financial markets and complexity of stocks make the mathematical results mostly insignificant. The only correlations found were a positive correlation for highly paid CEOs and a negative correlation for insider recruitment. The thesis concludes that an optimal CEO is defined by its leadership abilities, not by its personal profile. / När ett börsnoterat företag byter VD kommer aktiemarknaden att reagera på ett positivt eller negativt sätt. Denna uppsats använder multipel regressionsanalys för att undersöka vilka egenskaper hos den nya VD:n som kan framkalla positiva eller negativa reaktioner från aktiemarknaden, både på en dags och på ett års tid. De matematiska resultaten jämförs med professionella åsikter om vad som definierar en optimal VD. De ineffektiva egenskaperna hos den finansiella marknaden kombinerat med aktiers komplexitet gör de matematiska resultaten till stor del insignifikanta. De enda korrelationerna som hittades var en positive korrelation för högt betalda VD:ar och en negativ korrelation för internt rekryterade VD:ar. Uppsatsen drar slutsatsen att en optimal VD definieras av sina ledarskapsförmågor och inte av sin personliga bakgrund.

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.

This thesis examines three important topics in corporate finance: the relation between the dividend-paying status of a firm and its investment and operating performance following a seasoned equity offering (SEO), the market's view on one-dollar CEO salary announcements, and the value of corporate social responsibility (CSR) in the event of a data breach. First, I provide an in-depth analysis of the connection between dividend payouts and corporate investment of SEO firms. Empirical studies have documented the decline in post-issue operating performance of SEO firms, and the potential overinvestment of SEO proceeds seems to be a critical factor. Studies on dividend payouts argue that the agency cost of overinvestment could be lowered when dividends are paid to reduce free cash flows held by managers. To examine the connection, I utilize two post-issue dividend policies, paying consecutive dividends or nothing, to separate my sample of SEO firms and compare the two groups' post-issue investment and operating performance. I find that non-dividend-paying SEO firms overinvest more, leading to the deterioration of asset turnover and worse post-issue operating performance compared with dividend-paying ones. The results suggest a beneficial effect of consistent dividend payouts on post-SEO business operations. Second, I examine the market reaction to the public announcement of a $1 CEO salary decision using explicit reasons for the decision and mechanisms for dealing with the base salary to disentangle possible explanations for the reaction. It shows that the market does not favour the so-called personal sacrifice when CEOs eliminate their salary to counter a downturn or crisis. When a firm is in a predicament or has poor performance, the market sees its CEO’s decision to give up the salary as a signal that the outlook for the firm is bleak and the CEO is attempting to save their position. However, when newly hired CEOs start with a $1 salary, the market reacts positively. The results ascertain that a $1 salary is not seen purely as a vehicle for interest alignment. Third, I investigate whether public firms' CSR activities pay off when they suffer a data breach that potentially harms their reputation and hurts firm value. I use a sample of US data breaches and two sources of environmental, social, and corporate governance (ESG) ratings to investigate whether CSR engagement by public firms mitigates the negative stock market reactions to their data breach announcements. I utilize pre-breach ESG scores to separate my sample of breached firms into high and low CSR groups. Using event study methodology, I find that the market reacts significantly negatively to only the low CSR group's announcements. Consistent with previous studies on how firms benefit from CSR activities when they face adversity and lose public trust, the results suggest that social performance protects firms against information leakage incidents. However, the extent to which the market assesses the ratings from different providers is still divergent, which is a concern for practitioners. / Thesis / Doctor of Philosophy (PhD)