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Severance Payments (severance + payment)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Severance Payments and Firm,specific Human Capital

LABOUR, Issue 1 2003
Jens Suedekum
What effect does employment protection through severance payments have on the behaviour of employed workers? We analyse this issue within a stochastic two,period framework where workers decide on human capital investments and find two competing effects: severance payments imply higher job security that fosters human capital formation. At the same time, a lay,off is perceived by the workers to be a weaker penalty if severance payments are provided. This incentive lowers their optimal amount of firm,specific investments. Which effect prevails on balance depends on the distribution of investment returns among firm and workers. For strong positive reactions, employment protection is also in the interests of the firm. [source]

The Employment Effects of Severance Payments with Wage Rigidities,

THE ECONOMIC JOURNAL, Issue 506 2005
Pietro Garibaldi
Firing costs have two separate dimensions: a transfer from the firm to the laid-off worker and a tax paid outside the firm-worker pair. To avoid the ,bonding critique' most of the existing literature implicitly assumes that, in the presence of wage rigidity, transfers have the same real effects as taxes. This paper shows that this presumption is in general misplaced, especially so when the degree of wage rigidity is endogenous. The predictions of our theory find empirical support in a panel data-set of OECD countries. [source]

Firing Costs, Employment Fluctuations and Average Employment: An Examination of Germany

ECONOMICA, Issue 266 2000
Jennifer Hunt
West Germany's Employment Promotion Act of 1985 facilitated the use of fixed-term contracts and increased the number of dismissals above which the employer is required to establish a ,social plan' (involving severance payments). I assess the effect of this reduction in ,firing costs' on movements in employment, using monthly data on a panel of detailed manufacturing industries for 1977-92. I also examine the effect of introducing flexible hours of work in certain industries beginning in 1985. I find that employment adjustment was unaffected by the lower firing costs, but slowed by the greater working hours flexibility. [source]

Managerial Compensation and Capital Structure

JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 4 2000
Elazar Berkovitch
We investigate the interaction between financial structure and managerial compensation and show that risky debt affects both the probability of managerial replacement and the manager's wage if he is retained by the firm. Our model yields a rich set of predictions, including the following: (i) The market values of equity and debt decrease if the manager is replaced; moreover, the expected cash flow affirms that retain their managers exceeds that affirms that replace their managers, (ii) Managers affirms with risky debt outstanding are promised lower severance payments (golden parachutes) than managers affirms that do not have risky debt. (Hi) Controlling for firm's size, the leverage, managerial compensation, and cash flow of firms that retain their managers are positively correlated, (iv) Controlling for the firm's size, the probability of managerial turnover and firm value are negatively correlated, (v) Managerial pay-performance sensitivity is positively correlated with leverage, expected compensation, and expected cash flows. [source]

Earnings-related Severance Pay

LABOUR, Issue 4 2006
Laszlo Goerke
However, severance payments are usually related to wages. It is shown that earnings-related, mandated severance pay will have ambiguous employment effects if effort can be varied continuously. A substitution of the earnings-related for the lump-sum component reduces employment. Thus, the prevalent form of severance payments in OECD countries might have less advantageous employment effects than previously conjectured. [source]

Severance Payments and Firm,specific Human Capital

LABOUR, Issue 1 2003
Jens Suedekum
What effect does employment protection through severance payments have on the behaviour of employed workers? We analyse this issue within a stochastic two,period framework where workers decide on human capital investments and find two competing effects: severance payments imply higher job security that fosters human capital formation. At the same time, a lay,off is perceived by the workers to be a weaker penalty if severance payments are provided. This incentive lowers their optimal amount of firm,specific investments. Which effect prevails on balance depends on the distribution of investment returns among firm and workers. For strong positive reactions, employment protection is also in the interests of the firm. [source]

Nonprofit association CEOs how their context shapes what, how, and why they learn

NONPROFIT MANAGEMENT & LEADERSHIP, Issue 1 2007
John J. Sherlock
This qualitative study explored the learning experiences of twelve national nonprofit membership association CEOs using a phenomenological research design. While the professional context of an organization's chief executive is considered unique from other executive positions, the impact of this context on what and how CEOs learned was unclear. The findings describe association CEO learning as being affected in significant ways by the politically charged context in which the nonprofit association CEO operates with his or her board of directors. Power imbalances with staff and the board make learning through traditional organizational dialogue a less useful learning process for the CEOs. Furthermore, the feelings of isolation and vulnerability that are generated from the nonprofit association CEO context often cause CEOs to use private reflection and dialogue with their spouse as primary learning mechanisms. The study concludes that the association CEO context uniquely and profoundly shapes what, how, and why CEOs learn. Perhaps lacking the financial security of lucrative severance payments, which are often specified in employment contracts of for-profit CEOs, the nonprofit association CEO will often temper his or her actions to avoid personal vulnerability with a politically charged board of directors. [source]