RT Article
T1 Business Ethics and the Decision to Adopt Golden Parachute Contracts: Empirical Evidence of Concern for All Stakeholders
JF Journal of business ethics
VO 86
IS 1
SP 65
OP 79
A1 Evans, Jocelyn D.
A1 Hefner, Frank Louis
A2 Hefner, Frank Louis
LA English
YR 2009
UL https://ixtheo.de/Record/1785633929
AB Golden parachutes are often viewed as a form of excessive compensation because they provide senior management with substantial payouts following an acquisition while other stakeholders are subjected to layoffs, disrupted business relationships and other negative externalities. Using a sample of S&P 500 firms, an economic and ethical justification for this type of contract is given. Golden parachutes ensure effective corporate governance that, in turn, preserve the firm's value for all stakeholders. Boards of directors enter into parachute agreements to protect recently hired CEOs' human capital during periods of financial uncertainty and, thus, potential takeover activity. From an ethics viewpoint, golden parachutes are valuable to all stakeholders because they encourage merger or acquisition in lieu of bankruptcy.
K1 Organizational Commitment
K1 Business Ethics
K1 CEO executive pay
K1 Mergers
K1 tender offers
DO 10.1007/s10551-008-9818-9