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Antitakeover Provisions and CEO Monetary Benefits: Revisiting the E-Index

Al Dah, B.; Michael, A.; Dixon, R.

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Authors

B. Al Dah



Abstract

We analyze and group antitakeover provisions as they relate to CEO’s monetary benefits. We specifically focus on the determinants of the six E-index provisions that were proposed by Bebchuk et al. (2009) to conversely affect firm value. The six provisions are split into two indices: those that provide managers with a monetary benefit if a takeover was successful (MB provisions) and those that do not (TP provisions). Results indicate that CEOs with a role duality use their power to influence the adoption of MB provisions and resist the adoption of TP provisions. Moreover, in the presence of CEO duality, the relationship between MB provisions and firm value worsens. On the other hand, the relationship between TP provisions and firm value is unaffected by the presence of CEO duality. This suggests that CEOs having a role duality do not feel the need to work in the shareholders’ best interest when entrenched with MB provisions. Our findings suggest that studying all the provisions of the E-index as a whole can be misleading in some cases.

Citation

Al Dah, B., Michael, A., & Dixon, R. (2017). Antitakeover Provisions and CEO Monetary Benefits: Revisiting the E-Index. Research in International Business and Finance, 42, 992-1004. https://doi.org/10.1016/j.ribaf.2017.07.033

Journal Article Type Article
Acceptance Date Jul 3, 2017
Online Publication Date Jul 14, 2017
Publication Date Dec 31, 2017
Deposit Date Jul 21, 2017
Publicly Available Date Mar 28, 2024
Journal Research in International Business and Finance
Print ISSN 0275-5319
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 42
Pages 992-1004
DOI https://doi.org/10.1016/j.ribaf.2017.07.033
Public URL https://durham-repository.worktribe.com/output/1373365

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