When Labor Has a Voice in Corporate Governance Authors not in favor of employee stock ownership If employees have a greater voice in corporate governance,the company will deviate more from value maximization, spend less on new capital, take fewer risks, grow more slowly, create fewer new jobs,and exhibit lower productivity. Fixed claims residual claims v.shareholder value- maximization labor as a corporate stakeholder Value of wages(like a risky debt)=fixed claim-put option =fixed claim-(labor's claim in bankruptcy-the amount that a bankrupt company could actually pay to labor)When Labor Has a Voice in Corporate Governance • Authors not in favor of employee stock ownership • If employees have a greater voice in corporate governance, the company will • deviate more from value maximization, • spend less on new capital, • take fewer risks, • grow more slowly, • create fewer new jobs, and • exhibit lower productivity. • Fixed claims + residual claims v. shareholder value- maximization • labor as a corporate stakeholder • Value of wages (like a risky debt) = fixed claim - put option =fixed claim – (labor’s claim in bankruptcy – the amount that a bankrupt company could actually pay to labor)