Quid-pro-quo exchanges of outside director defined benefit pension plans for equity-based compensation

Autor:	Mark L. Power, Cynthia J. Campbell, Roger D. Stover
Rok vydání:	2006
Předmět:	Finance Organizational Behavior and Human Resource Management Economics and Econometrics Pension business.industry Strategy and Management Mechanical Engineering Corporate governance Metals and Alloys Equity (finance) Industrial and Manufacturing Engineering Economics business Stock (geology)
Zdroj:	Journal of Pension Economics and Finance. 5:155-174
ISSN:	1475-3022 1474-7472
Popis:	The independence of outside directors is critical to corporate board effectiveness. We examine a unique period in corporate governance when outside directors' defined benefit pensions are replaced with increases in equity. Firms with pension plans significantly underperform their industry in terms of stock returns. Firms terminating the pension plans in exchange for equity have significant increases in stock returns relative to their industry subsequent to the change. All samples outperform the ROA and ROE industry medians both before and after the change in compensation, indicating pressure from organized investors likely comes from stock performance, not accounting performance. Investor rights pressure and outside director compensation and not takeover risk or institutional ownership best explain firms altering outside director compensation, with board of director effectiveness improving.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::42a82c3369f769f9a7e6d30778538894 https://doi.org/10.1017/s1474747206002472 Zobrazit plný text záznamu