Golden Parachutes: CEOs and the Exercise of Social Influence.
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| Title: | Golden Parachutes: CEOs and the Exercise of Social Influence. |
|---|---|
| Authors: | Wade, James1, O'Reilly, III, Charles A.1, Chandratat, Ike1 |
| Source: | Administrative Science Quarterly. Dec90, Vol. 35 Issue 4, p587-603. 17p. 3 Charts. |
| Subject Terms: | Golden parachutes (Executive compensation), Agency theory, Chief executive officers, Outside directors of corporations, Corporate governance, Social influence, Compensation management, Executive compensation, Economic impact, Mergers & acquisitions, Risk exposure |
| Abstract: | Using an agency theory framework and data on 89 Fortune 500 firms, we assess whether the granting of golden parachutes to chief executive officers is the result of an economically rational process or determined by the social influence of the CEO. While increased takeover risk is associated with a higher incidence of GPs, as predicted by economic theory, CEOs who are able to appoint more outsiders to their board are also more likely to have GPs. These results suggest that both economic and social influence perspectives have merit and that the importance of each may depend on the ownership structure of the firm. [ABSTRACT FROM AUTHOR] |
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| Database: | Education Research Complete |
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