Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 7, 2010 erstellt
Beschreibung:
We show that the degree of control exerted by investors over entrepreneurial firms helps explain the design of employee compensation contracts, and in ways that are asymmetric for founders versus hired-on employees. Across 1,809 U.S. venture-backed companies, we find that firms with more VC/less founder dominance on average pay their employees higher cash salaries, provide stronger cash and equity incentives, and have more formal pay policies in place. However, the differences in cash pay and incentives only apply to hired-on employees and not to founders. Founders are special in that they receive similar compensation contracts regardless of the degree of founder/VC dominance. Our results are consistent with the argument that investor control diminishes hired-on employees' non-pecuniary benefits and access to the firm's unique technologies, both of which are important motivators of employment in innovative, high-potential young businesses