Inducement grants, hiring announcements, and adverse selection for new CEOs
研究了聘用外部CEO时的逆向选择问题如何影响激励授予的合同特征，发现信息不对称越严重，激励授予对新CEO公告回报的敏感性越高。
Abstract We examine how adverse selection problems when hiring new external CEOs affect contractual features of inducement grants. Focusing on the sensitivity of inducement grants to the new CEO announcement return ($ Sensitivity ), we find that firms provide inducement grants that are more sensitive to the new CEO announcement return when information asymmetry about the new CEO is more severe and the costs of adverse selection problems are higher. We also find a positive relation between the market reaction to the appointment and $ Sensitivity . We consider factors that reduce information asymmetry (e.g., engaging a search firm or appointing internal CEOs) and find they are associated with lower sensitivity of the inducement grant to the announcement.