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Labor Relations Commons

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University of Richmond

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Articles 31 - 32 of 32

Full-Text Articles in Labor Relations

Job Loss And The Fraying Of The Implicit Employment Contract, Kevin F. Hallock Jan 2009

Job Loss And The Fraying Of The Implicit Employment Contract, Kevin F. Hallock

Economics Faculty Publications

Most workers have one employment contract that is explicit and another one that is implicit. The explicit employment contract specifies working hours, compensation, and job tasks. The implicit contract involves expectations about the extent to which the employment relationship is not just a payment for labor on the spot market but instead is likely to continue over time. The possibility of a longer-term commitment between an employer and its employees in turn has a number of implications: for example, whether firms will seek to avoid mass layoffs unless or until absolutely necessary; whether firms may cushion the wages and compensation …


Layoffs, Top Executive Pay, And Firm Performance, Kevin F. Hallock Sep 1998

Layoffs, Top Executive Pay, And Firm Performance, Kevin F. Hallock

Economics Faculty Publications

This paper examines the connection between layoffs, executive pay, and stock prices. Firms that announce layoffs in the previous year pay their CEOs more, and give their CEOs larger percentage raises than firms which do not have at least one layoff announcement in the previous year. However, the likelihood of announcing a layoff varies dramatically along with other dimensions, for example firm size, which are also correlated with CEO pay. Once firm-specific fixed effects are controlled for, the CEO pay premium for laying off workers disappears. In addition, there is a small negative share price reaction to layoff announcements.