REVISION: An Empirical Analysis of CEO Employment Contracts: What Do Top Executives Bargain For?

By Stewart J. Schwab

In this paper, we examine the key legal characteristics of 375 employment contracts between some of the largest 1500 public corporations and their Chief Executive Officers. We look at the actual language of these contracts, asking whether and in what ways CEO contracts differ from what are thought of as standard employment contract features for other workers. Our data provide some empirical answers to several common assertions or speculations about CEO contracts, and shed light on whether these contracts are negotiated solely to suit the preferences of CEOs or have provisions that insure that the employers' interests are also safeguarded. After giving an overview of the general characteristics of a CEO employment contract, and the process by which they are negotiated, we focus on five contracting issues: (1) the term just cause that defines when an executive can be terminated involuntarily with penalties; (2) the good reason termination clauses in the contract that permit an ...

Stewart J. Schwab Jonathan and Ruby Zhu Professor of Law
Photo of Stewart Schwab

Contact Information

Cornell Law School
206 Myron Taylor Hall
Ithaca, NY 14853-4901

Phone: (607) 255-2303
Fax: (607) 255-7193


Gina Jackson
Cornell Law School
315 Myron Taylor Hall
Ithaca, NY 14853-4901

Professional Biography

Stewart J. Schwab is the Jonathan and Ruby Zhu Professor of Law at Cornell Law School, and was its Allan R. Tessler Dean from 2004 to 2014. He has been a member of the Cornell Law School faculty since 1983.

A native of North Carolina, he obtained his J.D. as well as a Ph.D. in Economics from the University of Michigan. Before joining the Cornell faculty, Professor Schwab clerked for Judge J. Dickson Phillips, Jr. of the U.S. Court of Appeals for the Fourth Circuit, and then for Justice Sandra Day O'Connor of the United States Supreme Court.

Professor Schwab is a leading scholar in economic analysis of law and in employment law. He was a Reporter for the American Law Institute’s recently completed Restatement of Employment Law, and has been named by Human Resource Executive as one of the 50 most powerful employment attorneys in America. He is an editor of the Journal of Empirical Legal Studies, and a member of the Society of Empirical Legal Studies and the American Law and Economics Association.

Professor Schwab has taught widely in the curriculum, including Torts, Contracts, Corporations, Discrimination Law, Employment Law, Labor Law, Law and Economics, and Whistleblower Law, among other courses.


B.A., Swarthmore College, 1975
J.D., University of Michigan Law School, 1980
Ph.D., University of Michigan, 1981