We examine the use of key employee retention plans (KERPs) in bankrupt firms. Our results do not support the common view that retention bonus plans enrich managers at the expense of creditors. On the contrary, creditor control of bankruptcies increases the likelihood that bankrupt rms o er retention and incentive bonuses to managers. Retention bonus plans are also more common when there is a greater risk
of employee turnover. We nd that incentives provided under such plans improve bankruptcy outcomes for creditors along several dimensions: they increase the likelihood of emergence, reduce bankruptcy duration, and result in fewer violations of the absolute priority rule.
JEL classi cation: G30, G32
Keywords: Key employee retention plans (KERPs); Chapter 11; compensation; retention bonuses; creditor control of bankruptcies; management incentives in bankrupt firms
학회소식
[2012년 제 4차] Provision of Management Incentives in Bankrupt Firm
작성자 : 관리자
조회수 : 1041
게시일 :
2012-12-12
