Research conducted by Drexel LeBow’s Ralph Walkling, executive director of the Center for Corporate Governance; Eliezer Fich, associate professor of finance and a Center fellow; and Anh Tran, who recently earned his Ph.D. at LeBow and is now a professor at the Cass Business School at City University London, has recently been covered by Bloomberg and the New York Times Blog, as well as a number of French publications including ZoneBourse, Le Monde, and NewsBanque.
The researchers found that chief executives with over-generous severance pay arrangements sell out significantly more cheaply when weighing up a takeover bid. Company bosses with so-called golden parachutes that are 10 percent more generous than the average agreed to sell their companies for a 5 percent smaller takeover premium.