SUCCESS FACTOR FUNCTIONAL FAMILIARITY – AN ANALYSIS OF GERMAN MDAX COMPANIES

The purpose of this paper is to consider the German stock market and develop a method for company valuation that complements the methods used to date. The paper elaborates on the novel construct of functional familiarity, consisting of board size, board fluctuation, diversity management, long-term incentive plans (LTIP) and research and development intensity, in relation to company performance. Company reports of MDAX-listed companies were collected and examined for the years 2013 to 2019. Based on the empirical investigation in the form of regression analyses, the statistically significant influence of the executive board size and board fluctuation, as well as of the LTIP, on the development of the share price could be demonstrated. The results indicate that the evaluation tool of functional familiarity in its current constellation identified three factors that should at least lead to a critical view of the stakeholder.