search query: @author Kole, S. R. / total: 2
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| Author: | Kole, S. R. Lehn, K. M. |
| Title: | Deregulation and the adaptation of governance structure: The case of the U.S. airline industry |
| Journal: | Journal of Financial Economics
1999 : APR, VOL. 52:1, p. 79-117 |
| Index terms: | Deregulation Airlines Industries Corporate governance USA |
| Language: | eng |
| Abstract: | Deregulation provides a natural experiment for examining how governance adapts to structural changes in the business environment. In this paper, it is investigated the evolution of governance structure, characterized by ownership concentration, compensation policy, and board composition, in the U.S. airline industry during a 22-year period surrounding the Airline Deregulation Act of 1978. Consistent with theory, it is found that after deregulation: (i) equity ownership is more concentrated, (ii) CEO pay increases, (iii) stock option grants to CEOs increase, and (iv) board size decreases. Airlines' governance structures gravitate toward the system of governance mechanisms used by unregulated firms. The adaptation process is gradual, however, suggesting that it is costly to alter organizational capital. |
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