This monograph analyzes two important questions that arise during the privatization of a state-owned enterprise: who should the chief executive officer be, and what financial contract should be offered to the CEO?

The authors argue that resolution of the CEO selection and financial-contracting problems can accelerate efficiency gains realized by the enterprise.

They also identify several key points that shareholders should consider when designing a financial contract that has the incentives to encourage the chief executive to take the necessary measures to lead the enterprise through successful transition to the private sector and that exploits new remuneration alternatives available under ownership by the private sector.

An empirical methodology is presented for analyzing an enterprise's privatization, looking for evidence that financial-agency conflict has changed as a result of the shift from public- to private-sector ownership. The results of two British privatization case studies - British Airways and Enterprise Oil - are also presented.