Economics, Econometrics and Finance
4 years ago

Powerful Managers Exploit Bankruptcy to Maintain Lavish Pay

Northwestern University law review
Paying CEOs in Bankruptcy: Executive Compensation When Agency Costs Are Low
M. Todd Henderson

Paper Summary

The article examines executive compensation in bankrupt firms to see if reducing agency costs changes how CEOs are paid. The researchers find that even when agency costs are low, CEO pay remains similar to firms with higher agency costs. This suggests that reducing agency costs does not significantly alter how CEOs are compensated.

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