Academic

Thomas, O'Hara, and Martin on CEO Bargaining for Arbitration

By Lawrence Solum

Randall S. Thomas , Erin A. O'Hara and Kenneth J. Martin (Vanderbilt University - School of Law , Vanderbilt University School of Law and New Mexico State University - Department of Finance & Business Law) have posted When Do CEOs Bargain for Arbitration?: A Theoretical and Empirical Analysis on SSRN.  Here is the abstract:

In this paper, we ask whether CEOs bargain to include binding arbitration provisions in their employment contracts. After exploring the theoretical arguments for and against including such provisions in these agreements, we use a large sample of CEO employment contracts to test the several different hypotheses for including such provisions. We find that only about one half of CEO employment contracts in our sample include such provisions. We further find that CEOs that receive a higher percentage of long term incentive pay as a fraction of their total pay, that work in industry sectors that are undergoing greater amounts of change, and that have lower long term profitability are statistically significantly more likely to have arbitration provisions in their employment contracts.

Full post as published by Legal Theory Blog on August 27, 2008 (boomark / email).