Abstract
We utilize a sample of spinoff firms that need to form a new board of directors, to shed light on the chief executive officer (CEO) influence hypothesis. We find spinoff boards with a CEO who was the parent firm CEO to be similarly structured to the boards of industry and size-matched peers, whereas spinoff boards with nonparent CEOs are structured for greater monitoring. Consistent with our board structure results, the CEO compensation and replacement decisions of parent CEO spinoff boards are more lenient toward spinoff CEOs, whereas those of nonparent CEO spinoff boards are more consistent with protecting shareholder benefits.
Original language | English |
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Pages (from-to) | 1324-1349 |
Number of pages | 26 |
Journal | European Financial Management |
Volume | 26 |
Issue number | 5 |
DOIs | |
State | Published - Nov 1 2020 |
Scopus Subject Areas
- Accounting
- General Economics, Econometrics and Finance
Keywords
- board of directors
- CEO compensation
- CEO influence
- CEO turnover
- spinoff