Cadman, Brian D.; Campbell, John L.; Klasa, Sandy - 2016
Efficient contracting predicts that ex-ante severance pay contracts are offered to CEOs as protection against downside … that ex-ante contracted severance pay is positively associated with proxies for a CEO’s risk of dismissal and costs the CEO … would incur from dismissal. Additionally, we show that the contracted severance payment amount positively impacts CEO risk …