These differences include: stock performance, equity stake in the firm, managerial incentives, research and development investment, and outlook towards mergers and acquisitions.
[3] Scholars such as Joon Mahn Lee, Jongsoo Jays Kim, and Joonhyung Bae, concluded that founder CEOs continually invest in new projects and explore new knowledge to benefit the firm in the long-term.
Eleven percent of the large capitalization firms in the United States are led by founder CEOs, including well-known companies such as Facebook, Netflix, Nvidia, FedEx and Amazon.
Founders do not have a particular role once the business is established, but their influence inevitably continues as they designed the firm's blueprint affecting structures and decision-making.
Differences identified include stock performance, equity stake, managerial incentives, innovation investment and participation in mergers and acquisitions.
[7] The six runners-up, all founder CEOs, were: Bill Gates, Warren Buffett, Martha Stewart, Bernard Madoff, Sergey Brin and Oprah Winfrey.
These companies include: Facebook, Netflix, Under Armour, Nvidia, Amazon.com, Starbucks, Regeneron Pharmaceuticals, L Brands, VeriSign, FedEx, Salesforce.com, Akamai Technologies, Intercontinental Exchange, and SanDisk.
[9] Fahlenbrach, like other scholars, concluded that founder CEOs have a larger equity stake in the firm, potentially reducing the principal agent problem.
[3] This founder CEO attachment to their firm results in lower salaries, which can be seen in a study completed by Noam Wasserman on 528 ventures between the years 1996 and 2002.
Thus suggesting that founder CEOs are not as concerned with job security or impacted by short term performance, as a result resources are dedicated to the long-term.
[2] Joon Mahn Lee, Byoung-Hyoun Hwang, and Hailiang Chen suggested that the additional risks taken on by founder-led firms stem from overconfidence at the CEO level.
[11] In a study completed on the S&P 1500 firms by Lee, Hwang, and Chen, it was concluded that founder CEOs use fewer negative words in both personal tweets and statements regarding earnings.
Investors are unaware of this overconfidence bias among founder CEOs and take them at face value indicating no discount taken into consideration in the financial markets.
When analyzing option-exercise behavior using the value of vested in-the-money options to the total compensation, they concluded that founder CEOs had a significantly greater ratio.