Do classified boards protect top management? : evidence from shareholder proposals
Name
1051300054-MIT.pdf
Description
Full printable version
Size
5.98 MB
Format
Adobe PDF
Checksum (MD5)
322255e1bbe7051be07784b3dad9372d
Author(s)
Martins, Fernando Miguel Pinto
Advisor(s)
David Thesmar.
Date Issued
2018
Publisher
Massachusetts Institute of Technology
Abstract
This paper examines the relationship between classified boards and managerial entrenchment by applying a panel regression discontinuity design to shareholder proposals on board declassification. We focus on shareholder proposals that pass or fail by a small margin of votes in order to provide a causal estimate of the impact of board declassification. We find that shareholder proposal approval leads to a reduction in CEO compensation, an increase in the likelihood of CEO replacement, a positive but insignificant impact on pay-performance elasticity, and an increase in firm value. The reduction in CEO compensation is strongest among firms who possess weaker levels of corporate governance. These findings suggest that classified boards protect top management and lead to higher levels of managerial entrenchment.
Description
Thesis: S.M. in Management Research, Massachusetts Institute of Technology, Sloan School of Management, 2018.
Cataloged from PDF version of thesis.
Includes bibliographical references (pages 38-40).
Subjects
Sloan School of Management.
MIT Department
Sloan School of Management
Terms of Use
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