Signing Bonus, Managerial Ability, and Corporate Performance
43 Pages Posted: 15 Aug 2015
Date Written: August 13, 2015
This paper uses hand-collected data to study CEO's cash signing bonus among listed U.S. firms. Empirical findings suggest that issuing cash signing bonus is not motivated by free cash flow problem or by a higher termination risk of the new position . Instead, CEOs who receive cash signing bonus are less likely to be over-compensated, supporting the Ex Post Settlement mechanism. Moreover, our results suggests that company uses cash signing bonus to attract talent CEO who enhances subsequent corporate performance.
Keywords: Perquisites, Perks, Cash Signing Bonus, Managerial Ability, Executive Compensation
JEL Classification: G30, J33
Suggested Citation: Suggested Citation