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Antitakeover provisions and CEO monetary benefits : revisiting the E-index.

Al Dah, B. and Michael, A. and Dixon, R. (2017) 'Antitakeover provisions and CEO monetary benefits : revisiting the E-index.', Research in international business and finance. .

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.

Item Type:Article
Full text:Publisher-imposed embargo until 14 January 2019.
(AM) Accepted Manuscript
First Live Deposit - 21 July 2017
Available under License - Creative Commons Attribution Non-commercial No Derivatives.
File format - PDF
(983Kb)
Status:Peer-reviewed
Publisher Web site:https://doi.org/10.1016/j.ribaf.2017.07.033
Publisher statement:© 2017 This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Record Created:21 Jul 2017 10:28
Last Modified:21 Jul 2017 12:38

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