Corporate spinoffs and executive compensation

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

1 Scopus Citations
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Detail(s)

Original languageEnglish
Article number23
Journal / PublicationFrontiers of Business Research in China
Volume12
Issue number1
Online published11 Dec 2018
Publication statusOnline published - 11 Dec 2018

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Abstract

This paper investigates the impact of corporate spinoffs on executive compensation. We find no significant association between executive compensation and stock returns prior to spinoffs, but a significant positive association between the two afterwards. We also find evidence that corporate governance generally improves after the spinoff. In addition, the positive association between executive compensation and stock returns is more pronounced for firms with greater improvements in their corporate governance. Overall, our findings support the notion that spinoffs create value by reducing agency costs.

Research Area(s)

  • CEO compensation, Corporate governance, Spinoffs

Citation Format(s)

Corporate spinoffs and executive compensation. / Law, Justin; Yu, Wayne.
In: Frontiers of Business Research in China, Vol. 12, No. 1, 23, 11.12.2018.

Research output: Journal Publications and ReviewsRGC 21 - Publication in refereed journalpeer-review

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