Author : Myriam Polydor
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (17 download)
Book Synopsis CEO Death Benefit Plans by : Myriam Polydor
Download or read book CEO Death Benefit Plans written by Myriam Polydor and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Death benefit plans, commonly called "golden coffins", are a highly controversial compensation feature, in which executives receive severance pay upon death. While they have been criticized by the media and the public for a decade, the extensive academic literature on managerial compensation has barely addressed the topic. This thesis aims to fill the surprising research gap by taking advantage of the newly available information, following the 2006 SEC disclosure changes. Data on CEO death benefit plans is hand-collected from proxy statements filings, for a sample of 847 U.S. firms from the S&P 1500. The resulting unique dataset shows that golden coffins are large and widespread, that their main component is accelerated unvested equity pay, and that companies offering them, are likely to have some significantly weaker corporate governance mechanisms. Furthermore, in an event study on shareholder reaction upon their initial disclosure, the study finds some evidence that, accelerated stock awards and cash death benefits, the two largest golden coffin components, are negatively perceived by shareholders, translating into a substantial equity value loss. Overall, the findings suggest that these large death benefit plans, common in U.S. companies, are partly the result of a corporate governance failure in those firms. The study thereby contributes considerably to the heated debate on executive compensation, by offering some support to the managerial power approach.
