Abstract
This study explored the extent to which a board of director's demographic characteristics and the financial incentives of its outside members influence a company's decision to privately repurchase stock from a dissident stockholder. Companies were more likely to refrain from such “greenmail” transactions the longer the average tenure of their outside directors and the more similar the directors' principal occupations. In companies whose top management's equity interests were small, corporate resistance to greenmail was most likely when the outside directors' equity interests were high relative to their board compensation and their lengths of tenure were similar.

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