This paper examines how direct involvement of employees in corporate governance affects executive compensation. German law mandates that half of the supervisory board seats belong to employee representatives in firms with over 2,000 domestic employees. For identification, we exploit this...

We argue two alternative routes that lead entrepreneurial start-ups to acquisition outcomes instead of liquidation. On one hand, acquisitions can come about through the control route with external financers such as venture capitalists (VCs). VCs take control through their board seats along with...