The effect of severance pay on management behavior during a takeover battle is generally ambiguous. Yet, the severance … still benefits from the increase in the merged firm's total value. Moreover, given that the managers are compensated … according to an identical linear incentive scheme, the optimal shareholder policy always entails a corner solution. Managers …

to important business decisions, specifically those involving corporate takeovers. Consistent with the evidence from …

-researched. The standard Inefficient Management Hypothesis suggests that more efficient managerial teams target less performing firms …

obtain high-powered incentives and, hence, a high personal income at the merger-management stage. …

obtain high-powered incentives and, hence, a high personal income at the merger-management stage. We derive conditions under …