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Full-Text Articles in Securities Law
Crowding Out Theory: Protecting Shareholders By Balancing Executives’ Incentives In France, The United States, & China, Palden Flynn
Crowding Out Theory: Protecting Shareholders By Balancing Executives’ Incentives In France, The United States, & China, Palden Flynn
Northwestern Journal of International Law & Business
This paper explores the differences between executive compensation regimes in France, the United States, and China. It asks whether there is a link between state regulation of real options as a form of executive compensation and state regulation of shareholder protections. This paper argues that if a country regulates the use of real options as compensation, then that country is also more likely to have strong shareholder protection laws. This argument seems to be true based on a descriptive review of executive compensation law and shareholder protections in France, the United States, and China.
If it is true that countries …
Commitment And Entrenchment In Corporate Governance, K.J. Martijn Cremers, Saura Masconale, Simone M. Sepe
Commitment And Entrenchment In Corporate Governance, K.J. Martijn Cremers, Saura Masconale, Simone M. Sepe
Northwestern University Law Review
Over the past twenty years, a growing number of empirical studies have provided evidence that governance arrangements protecting incumbents from removal promote managerial entrenchment, reducing firm value. As a result of these studies, “good” corporate governance is widely understood today as being about stronger shareholder rights.
This Article rebuts this view, presenting new empirical evidence that challenges the results of prior studies and developing a novel theoretical account of what really matters in corporate governance. Employing a unique dataset that spans from 1978 to 2008, we document that protective arrangements that require shareholder approval—such as staggered boards and supermajority requirements …