This paper examines the impact of corporate governance on managerial preferences, using variation in state adoption of antitakeover laws to empirically map out these preferences. The authors use plant-level data and exploit a unique feature of corporate law to control for potential biases associated with the timing of the laws. They find that when managers are insulated from takeovers, worker wages (especially those of white-collar workers) rise, while the creation and destruction of plants decrease. Overall productivity and profitability also decline. These results suggest that managers may prefer to enjoy a quiet life rather than engage in empire-building, as traditional models predict. The findings indicate that managers care more about workers than shareholders, and that the threat of takeovers may not be a significant disciplining mechanism.This paper examines the impact of corporate governance on managerial preferences, using variation in state adoption of antitakeover laws to empirically map out these preferences. The authors use plant-level data and exploit a unique feature of corporate law to control for potential biases associated with the timing of the laws. They find that when managers are insulated from takeovers, worker wages (especially those of white-collar workers) rise, while the creation and destruction of plants decrease. Overall productivity and profitability also decline. These results suggest that managers may prefer to enjoy a quiet life rather than engage in empire-building, as traditional models predict. The findings indicate that managers care more about workers than shareholders, and that the threat of takeovers may not be a significant disciplining mechanism.