Not Clawing the Hand that Feeds You: The Case of Co-Opted Boards and Clawbacks

摘要: Clawbacks can create significant tension between boards and management because the enforcement of clawbacks in event financial misreporting requires to recover compensation that has already been paid management. We examine how board co-option, defined as fraction comprising directors appointed after CEO assumed office, is related clawbacks. find more co-opted are less likely have this finding robust use director deaths an instrument for co-option. Moreover, we co-option important underlying mechanism through which longer-tenured CEOs reduce likelihood Finally, negative effect on pronounced when there committee a higher future Our paper contributes better understanding beholdenness influence policies punish misreporting.