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Professor David Yermack explains why large severance packages are common in the entertainment industry

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Excerpt from The Hollywood Reporter -- "'Severance is an insurance policy. In the entertainment business, you are putting a product out there that requires imagination. It's inherently risky to be in a creative business,' says compensation expert David Yermack, a professor at NYU's Stern School of Business. 'And you want to provide a safe landing for those you are firing without cause. It's a signal to the next group of managers that you will take care of them.'"

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