This paper is the first study on the effects of pay-performance sensitivity (PPS) on the performance of initial public offerings (IPOs) in the presence of social ties and family ties of the top managers with board members. We find that both social ties and family ties increase PPS. In turn, PPS...

This paper provides new evidence that correlated abnormal compensation of CEOs and directors is symptomatic of agency problems associated with cronyism. We find that director abnormal compensation has a negative impact on the likelihood of CEO turnover and reduces the sensitivity of CEO turnover...