Golden parachutes: A theoretical and empirical investigation.

摘要

In this dissertation I analyze the role that executive contracts, which pay bonuses conditional on the change in control of the executives' firm, play in the relationship between shareholders and managers. The controversies surrounding these contracts, which are popularly known as golden parachutes, are intimately tied up with take-over and merger market controversies.;The previous explanations for golden parachutes--including human capital accumulation incentives, protection of managers' deferred compensation due, and conflict resolution in combative take-over situations, and some sub-themes, are developed below. They are all found to be lacking logical completeness because of the wide variety of golden parachutes observed and the environments in which they occur. The empirical work, at the end of the paper, reinforces the conclusion that no one hypothesis can explain all incidents of golden parachutes.;The dissertation is organized as follows. Chapter One gives a practical description and legal history of golden parachutes. The logical structure of the competing hypotheses is developed in Chapter Two. Chapter Three summarizes previous empirical work in this area and provides new tests of the competing hypotheses using a sample of 483 1984 S&P 500 firms to analyze the incidence of control related severance agreements. In Chapter Four I present results from two event studies using monthly stock returns data of 60 firms who had adopted agreements between 1977 and 1982. The final Chapter provides a summary and conclusions of control-related compensation.