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Home Press Center Press Releases The Billion Dollar Question: What is the Impact of Private Equity on Workers and Companies?

The Billion Dollar Question: What is the Impact of Private Equity on Workers and Companies?

For Immediate Release: May 14, 2012
Contact: Alan Barber (202) 293-5380 x115

Washington, D.C. - JP Morgan Chase’s $2 billion trading stumble has many calling for added scrutiny of the banking sector. Private equity remains one class of these investments few know much about. Shedding some light on this consequential aspect of finance, Eileen Appelbaum of the Center for Economic and Policy Research (CEPR) will be a keynote speaker in Boston at this year’s SuperReturn U.S. conference for leading private equity experts.

Eileen will speak along with Heather Slavkin Corzo in the panel “The Billion Dollar Question: What is the impact of private equity on workers and companies?” To answer that, Appelbaum in part looks at the requirements typically placed on presidents of portfolio companies during these investments.

“Top executives in private equity buyouts often face perverse incentives,” said Appelbaum. “Essentially, they are handed a debt structure and they put up some of their own wealth with the promise of excellent returns, but only if they meet shareholder targets in a very short period of time. If not, they end up fired, sometimes in only 100 days, as is the case with nearly 40 percent of CEOs in these situations.”

Under this lens, Appelbaum looks at the source of private equity gains, private equity and jobs, and the risk of bankruptcy facing firms involved in private equity buyouts.

Eileen Appelbaum, a senior economist at CEPR, has emerged as a respected thought leader on private equity. A co-author of “A Primer on Public Equity,” Appelbaum has been quoted on private equity in a number of major media outlets.

To reach Eileen for comment, email Alan Barber (barber ‘at’ cepr.net).

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