Purpose - The purpose of this paper is to analyze the role of large equity ownership by both institutions and outside block shareholders in monitoring the board of directors’ decision to initially adopt defense mechanisms and the subsequent capital market reaction to the adoption....

This paper finds that CEO tenure for firms that adopt golden parachutes is significantly lower than that of nonadopting firms. These CEOs are frequently hired subsequent to control activity such as financial distress, takeover contests, or proxy fights. In the eighties, boards of directors had...