Entrenchment and Severance Pay in Optimal Governance Structures
研究如何激励现任CEO改善管理效果，同时考虑公司更换CEO的政策，分析CEO固守职位与离职补偿的组合在何种情况下是可取的，并预测固守、离职补偿与激励薪酬之间的相关性。
ABSTRACT This paper explores how motivating an incumbent CEO to undertake actions that improve the effectiveness of his management interacts with the firm's policy on CEO replacement. Such policy depends on the presence and the size of severance pay in the CEO's compensation package and on the CEO's influence on the board of directors regarding his own replacement (i.e., entrenchment). We explain when and why the combination of some degree of entrenchment and a sizeable severance package is desirable. The analysis offers predictions about the correlation between entrenchment, severance pay, and incentive compensation.