Corporate spinoffs and executive compensation

摘要

This paper investigates the impact of corporate spinoffs on executive compensation. We find no significant association between executive compensation and stock returns prior to spinoffs,but a significant positive association between the two afterwards.We also find evidence that corporate governance generally improves after the spinoff.In addition,the positive association between executive compensation and stock returns is more pronounced for firms with greater imp.rovements in their corporate governance. Overall,our findings support the notion that spinoffs create value by reducing agency costs.