This paper conducts a comparative analysis of stock ownership and golden parachutes as instruments for adjusting managerial incentives under corporate control contests. The paper demonstrates that under information asymmetry, where shareholders cannot observe the magnitude of the manager's private benefit of control, stock ownership is a more effective incentive adjustment instrument than golden parachutes. The paper also identifies the types of firms that would prefer golden parachutes over stock ownership, and shows that changes in the manager's incentive structure serve a signaling function regarding the expected magnitude of synergies in future M&A transactions. These theoretical results are consistent with existing empirical findings.