How Do Big Payments to CEOs Who Took Their Companies Into Bankruptcy Maximize Shareholder Value?

June 23, 2020

Bankruptcy typically means that shareholders are largely or totally wiped out. This should raise the question of why CEOs of companies that went bankrupt are getting large bonuses from these companies, as this NYT article points out.

These payments are consistent with a story where corporate boards primarily owe their  allegiance to top management, not to shareholders. It would have been worth noting this fact.

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