Footnote:
In: Journal of Corporate Finance, Vol. 42, December 2016 DOI/10.1016/j.jcorpfin.2016.09.001
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments December 1, 2016 erstellt
Description:
Many executives have compensation that is potentially forfeit conditioned on the circumstances surrounding their departure from the firm. We study firms' endogenous decisions to use such compensation "holdbacks" as a bonding device and find that firms with higher executive replacement costs, greater information asymmetry, more certain operating environments, and recent accounting concerns are more likely to have holdbacks. Additionally, holdbacks are negatively associated with incentive-based compensation, consistent with theoretical predictions that termination incentives can substitute for incentive pay. Further, holdbacks are positively associated with abnormal compensation, consistent with arguments that managers demand a premium to accept risky pay