Determinants of CEO severance contracts and their components and the effects of severance contracts on executive turnover
AbstractThis paper identifies the determinants of executive severance contracts and their components and the effect of severance contracts on the likelihood of forced and unforced turnover. The results provide evidence that severance contracts are used as a form of insurance for incoming CEOs. The results also provide evidence that a fixed cash component and a time-dependent maturity policy in the severance contract increases the likelihood of forced turnover.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economics and Business.
Volume (Year): 62 (2010)
Issue (Month): 4 (July)
Contact details of provider:
Web page: http://www.elsevier.com/locate/jeconbus
Executive severance agreements Executive compensation Executive turnover;
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