Employee Rewards And The Likelihood Of A Successful Initial Public Offering

Abstract

<span style="font-size: x-small;"><span style="font-family: Times New Roman;"><p class="MsoCommentText" style="text-align: justify; margin: 0in 0.5in 0pt;">In this paper, we survey employees about human resources practices regarding employee stock ownership plans (ESOPs) and profit sharing plans of firms that have registered for an IPO offering.<span style="mso-spacerun: yes;">  </span>We find that firms that had ESOPs in place prior to the registration of an IPO have a greater likelihood of eventually launching an IPO than those registered firms who do not.<span style="mso-spacerun: yes;">  </span>Our results broaden the existing finance literature of IPO analysis as we survey registered companies prior to their attempted IPO launch to determine whether their employee-based compensation structure impacts the likelihood of a successful IPO launch.<span style="text-decoration: underline;"></span></p></span></span>