Corpus ID: 17851762

Executive severance agreements

  title={Executive severance agreements},
  author={Tjomme O. Rusticus},
This paper studies severance agreements and their relation with CEO turnover. Severance agreements provide an interesting exception to the pay-for-performance paradigm. Not only do executives get paid after being fired, but frequently the payments are already contracted upon at the time the CEO is appointed. Using a representative sample of S&P 1500 firms, I find that half the CEOs have some form of severance agreement in the year they take office. The analysis of the determinants suggests that… Expand

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