On the antecedents of corporate severance agreements: An empirical assessment

This study of major corporations (n=481) provides an empirical assessment of the effects of several corporate governance variables (CEO duality, boards of director composition, officers and directors common stock holdings, institutional common stock holdings, number of majority owners) on the adoption of so-called severance agreements. A discriminant analysis indicates a significant multivariate function. Wilks lambda univariate analyses suggest that the percentage of common stock held by owners and directors and number of majority stock holders are the more robust discriminators.Dan R. Dalton is Professor of Management and Director of Doctoral Programs, Graduate School of Business, Indiana University. Formerly with General Telephone & Electronics (GT&E) for thirteen years, he received his Ph.D. from the University of California. Widely published in business and psychology, his articles have appeared in the Academy of Management Journal, Academy of Management Review, Journal of Applied Psychology, Journal of Business Ethics, Strategic Management Journal, Journal of Business Strategy, Behavioral Science, and Human Relations, as well as many others. He is the co-author of Case Problems in Management, Applied Readings in Personnel and Human Resource Management, and the forthcoming Absenteeism, Transfer, Turnover: An Interdependent Perspective. Professor Dalton is also co-principal investigator working on a five year grant provided by the General Motors Foundation in the general area of personnel policy.Paula L. Rechner is an Assistant Professor in the area of Strategic Management at the University of Illinois, Champaign-Urbana. She received her Ph.D. from Indiana University in 1986. Her primary research interest is corporate governance; specifically, her work has focused on corporate boards of directors and board leadership. In addition, she has been actively involved in research projects concerning strategic decision making, corporate control issues, and improving research methodology. Her articles have appeared in Organizational Behavior and Human Decision Processes, Strategic Management Journal, and Academy of Management Executive, as well as others.