An empirical analysis of the corporate control, tax and incentive motivations for adopting leveraged employee stock ownership plans
Abstract
This paper examines three motivations for leveraged ESOP adoption: as a takeover defense, as a mechanism for providing incentives to employees and as a vehicle for tax savings. ESOP adoption is more likely for companies with a higher predicted probability of takeover, but ESOP adopters have many characteristics that are different from takeover targets. Companies that adopt ESOPs can be distinguished from non-adopting companies based on characteristics associated with the tax and incentive effects of these plans. The size of the ESOP is shown to depend primarily on the tax and incentive characteristics.Download Info
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Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.
Volume (Year): 15 (1994)
Issue (Month): 4 (July/August)
Pages: 299-315
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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Rauh, Joshua D., 2006. "Own company stock in defined contribution pension plans: A takeover defense?," Journal of Financial Economics, Elsevier, vol. 81(2), pages 379-410, August.
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