Are Ex Ante CEO Severance Pay Contracts Consistent with Efficient Contracting?
研究发现CEO事前约定的离职补偿与解雇风险及解雇成本正相关，且补偿金额越高，CEO越愿意投资正净现值的高风险项目，支持有效契约理论。
Abstract Efficient contracting predicts that ex ante severance pay contracts are offered to chief executive officers (CEOs) as protection against downside risk and to encourage investment in risky projects with a positive net present value (NPV). Consistent with this prediction, we find that ex ante contracted severance pay is positively associated with proxies for a CEO’s risk of dismissal and costs the CEO would incur from dismissal. Additionally, we show that the contracted severance payment amount is positively associated with CEO risk taking and the extent to which a CEO invests in projects that have a positive NPV. Overall, our findings imply that ex ante severance pay contracts are consistent with efficient contracting.