IDEAS home Printed from https://ideas.repec.org/a/ids/ijbget/v18y2024i3p241-267.html
   My bibliography  Save this article

Egregious separation payments? The role of internal and external corporate governance

Author

Listed:
  • Cyrine Ben-Hafaïedh
  • Pierpaolo Pattitoni
  • Barbara Petracci

Abstract

Egregious, unfair, unethical, and immoral are all adjectives that the public and shareholder activists use to describe separation payments, which are payments made to executives who leave firms for various reasons. Such complaints often cite corporate governance issues as well, noting the potentially problematic relationships between executives' and board members' compensation levels. However, some studies of separation pay agreements suggest a lack of any significant relationship between the quality of corporate governance and separation payments. Using a unique, hand-collected dataset pertaining to actual payouts received by the top executives who left their posts between 2002 and 2013 in Italy, this study reveals instead that better quality corporate governance, in both internal and external dimensions, helps regulate the level of separation payments. In turn, it can offset stakeholders' perceptions of unfairness and the resulting negative consequences for the firm; such governance also can help minimise the prevalence of pay-for-failure cases.

Suggested Citation

  • Cyrine Ben-Hafaïedh & Pierpaolo Pattitoni & Barbara Petracci, 2024. "Egregious separation payments? The role of internal and external corporate governance," International Journal of Business Governance and Ethics, Inderscience Enterprises Ltd, vol. 18(3), pages 241-267.
    • Handle: RePEc:ids:ijbget:v:18:y:2024:i:3:p:241-267
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=138173
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijbget:v:18:y:2024:i:3:p:241-267. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=70 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.