Hard Debt, Soft CEO and Union Rents

Linus Wilson

No 2003-FE-12, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Sometimes shareholders are better off delegating to a CEO with different objectives than their own. A top manager motivated to share surpluses with workers can encourage union members to adopt efficient production methods. Bond covenants may constrain managers from acquiescing to union wage demands. Nevertheless, we argue that unions can win higher wages by altering the non-shirking constraint. Resistance to monitoring leads to deadweight losses that a â€

Keywords: efficiency wages; unions; bonds; takeovers; and CEO compensation (search for similar items in EconPapers)
JEL-codes: G32 G34 J41 J50 (search for similar items in EconPapers)
Date: 2003-09-01
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