厦门大学会计学科教师与研究生系列Seminar"之三

题    CEO  Severance Pay and Corporate Tax Planning

报告人:郑祯  助理教授

主持人:张国清  教授

    间:2017328(星期二)15:00-17:30

    点:厦门大学嘉庚409

 

论文摘要: We examine the association between CEO severance  pay (i.e., payment the CEO would receive if s/he is involuntarily terminated)  and corporate tax planning activities. We find that CEO severance pay increases  corporate tax planning activities, consistent with CEO severance pay offering  contractual protection against managers’ downside risk and thereby inducing  managers to engage in optimal tax planning. Further, CEO severance pay provides  stronger tax planning incentives in situations where we expect the downside risk  protection provided by severance pay to matter more – when CEOs are otherwise  more risk averse and when CEOs are more likely to bear downside risk. Finally,  we find that CEO severance pay reduces firms’ cost of equity capital, suggesting  that investors perceive the tax planning taken by managers to reduce agency  costs and increase firm value. Overall, our results suggest that CEO severance  pay provides tax planning incentives and contributes to shareholder  value.