How costly is corporate bankruptcy for the CEO?

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• 作者：B. Espen Eckbo ; ^a ; ^b ; ^d ; ^{b.espen.eckbo@dartmouth.edu" class="auth_mail" title="E-mail the corresponding author} ; Karin S. Thorburn^b ; ^d ; ^e ; ^{karin.thorburn@nhh.no" class="auth_mail" title="E-mail the corresponding author} ; Wei Wang^c ; ^{wei.wang@queensu.ca" class="auth_mail" title="E-mail the corresponding author}
• 关键词：Founder-incumbent CEO ; Executive labor market ; Bankruptcy costs ; Forced turnover ; CEO compensation
• 刊名：Journal of Financial Economics
• 出版年：2016
• 出版时间：July 2016
• 年：2016
• 卷：121
• 期：1
• 页码：210-229
• 全文大小：711 K

文摘

We examine chief executive officer (CEO) career and compensation changes for large firms filing for Chapter 11. One-third of the incumbent CEOs maintain executive employment, and these CEOs experience a median compensation change of zero. However, incumbent CEOs leaving the executive labor market suffer a compensation loss with a median present value until age 65 of $7 million (five times pre-departure compensation). The likelihood of leaving decreases with profitability and CEO share ownership. Furthermore, creditor control rights during bankruptcy (through debtor-in-possession financing and large trade credits) are associated with CEO career change. Despite large equity losses (median $11 million for incumbents who stay until filing), the median incumbent does not reduce his stock ownership as the firm approaches bankruptcy.