Abstract

http://ssrn.com/abstract=1298300
 
 

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Stock-Based Compensation and Top Management Turnover


Hamid Mehran


Federal Reserve Bank of New York

David Yermack


New York University (NYU) - Stern School of Business

May 1996

NYU Working Paper No. FIN-96-035

Abstract:     
We test the hypothesis that corporate managers leave their jobs less often when they receive stock-based compensation. In a sample of CEOs from 452 U.S. companies between 1984 and 1991, we find inverse associations between the probability of CEO turnover and the amount of stock option compensation in relation to cash pay. The association is even stronger when we exclude apparently involuntary CEO turnover. Our results suggest that stock-based compensation plays a significant role in helping firms retain the services of top managers.

Number of Pages in PDF File: 32

Keywords: Compensation, Ownership, Incentives, Turnover

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Date posted: November 11, 2008  

Suggested Citation

Mehran, Hamid and Yermack, David, Stock-Based Compensation and Top Management Turnover (May 1996). NYU Working Paper No. FIN-96-035. Available at SSRN: http://ssrn.com/abstract=1298300

Contact Information

Hamid Mehran (Contact Author)
Federal Reserve Bank of New York ( email )
33 Liberty Street
New York, NY 10045
United States
212-720-6215 (Phone)
David Yermack
New York University (NYU) - Stern School of Business ( email )
44 West 4th Street
Suite 9-160
New York, NY 10012-1126
United States
212-998-0357 (Phone)
212-995-4220 (Fax)
HOME PAGE: http://www.stern.nyu.edu/~dyermack
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