Impacts Of Mergers And Acquisitions On Executive Compensation Of Acquiring Firms
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Impacts Of Mergers And Acquisitions On Executive Compensation Of Acquiring Firms
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Author : Virginia Bodolica
language : en
Publisher:
Release Date : 2005
Impacts Of Mergers And Acquisitions On Executive Compensation Of Acquiring Firms written by Virginia Bodolica and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with categories.
Mergers And Acquisitions And Executive Compensation
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Author : Virginia Bodolica
language : en
Publisher: Routledge
Release Date : 2015-06-26
Mergers And Acquisitions And Executive Compensation written by Virginia Bodolica and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-06-26 with Business & Economics categories.
Over the past decades, the total value of executive compensation packages has been rising dramatically, contributing to a wider pay gap between the chief executive officer and the average worker. In the midst of the financial turmoil that brought about a massive wave of corporate failures, the lavish executive compensation package has come under an intense spotlight. Public pressure has mounted to revise the levels and the structure of executive pay in a way that will tie more closely the executive wealth to that of shareholders. Merger and acquisition (M&A) activities represent an opportune setting for gauging whether shareholder value creation or managerial opportunism guides executive compensation. M&As constitute major examples of high-profile events prompted by managers who typically conceive them as a means for achieving higher levels of pay, even though they are frequently associated with disappointing returns to acquiring shareholders. Mergers and Acquisitions and Executive Compensation reviews the existing empirical evidence and provides an integrative framework for the growing body of literature that is situated at the intersection of two highly debated topics: M&A activities and executive compensation. The proposed framework structures the literature along two dimensions, such as M&A phases and firm’s role in a M&A deal, allowing readers to identify three main streams of research and five different conceptualizations of causal relationships between M&A transactions and executive compensation. The book makes a comprehensive review of empirical studies conducted to date, aiming to shed more light on the current and emerging knowledge in this field of investigation, discuss the inconsistencies encountered within each stream of research, and suggest promising directions for further exploration. This book will appeal to researchers and students alike in the fields of organizational behavior and governance as well as accounting and accountability.
Merger Activity And Executive Pay
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Author : Sourafel Girma
language : en
Publisher:
Release Date : 2002
Merger Activity And Executive Pay written by Sourafel Girma and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2002 with Consolidation and merger of corporations categories.
Three Essays In Mergers And Acquisitions And Executive Compensation
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Author : Nada El-Hassan
language : en
Publisher:
Release Date : 2021
Three Essays In Mergers And Acquisitions And Executive Compensation written by Nada El-Hassan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
Several studies in the finance literature (and other fields) focus on how compensation contracts of CEOs shape incentives and affect risk-taking behaviour. We examine how CEOs with varying risk appetites approach merger and acquisition (M&A) deals differently due to incentives driven by their compensation structure. Relying on VEGA, the sensitivity of executive's portfolio to a one percent change in volatility of stock returns, we document that acquirers and targets behave differently vis-à-vis their compensation. We show that a longer time to completion is related to the target VEGA (and not bidder VEGA). We also find that a more risk-taking CEO (as encouraged by VEGA) selling his firm would delay completing a deal by a significant three weeks. We conjecture that target CEOs choose to delay deal completion to look for better bids that tally their need to change their portfolio of company holdings. Next, we link executive compensation, mergers and acquisitions, and environmental, social and governance in one framework that produces new insights into how CEO's incentives yield sub-optimal investment decisions. Our sample consists of 1,280 mergers (M&A) from the period of 1993-2018 and uses the CEO's wealth sensitivity to stock price volatility (VEGA) as a proxy for risk-taking behaviour. We establish that there is a shift in the relation between CSR rating and cumulative abnormal announcement returns of M&As deals. After 2008, the market for corporate control no longer rewards more commitment to CSR activities. We examine the performance of our sample of mergers in comparison with that of a matched sample of non-bidding firms vis-à-vis their environmental, social and governance (ESG) profiles over the long term. Our results indicate that more CSR commitment does not translate into better long-term returns for shareholders and stakeholders if the firms participate in M&As. Moreover, we investigate how the bidder and target CSR ratings, as well as management risk-taking incentives (proxied by VEGA), affect deals total synergy estimated around the announcement day. Our results show that firms with lower CSR ratings yield more synergy gains, which are not related to both bidder and target risk-taking incentives. Finally, we provide new evidence related to the debate whether corporate social responsibility (CSR) strategies intrinsically benefit organizations and contribute to wealth creation after controlling for CEO compensation. We utilize a sample of M&A deals spanning the period 1993 to 2018 of target firms with different CSR ratings and investigate the effect of CEOs' executive compensation driven incentives. Our main finding is that Low CSR firms becoming targets of M&A contests in the subperiod post-2008 record the highest cumulative average abnormal returns (compared to High CSR over the same period and other subsamples). We report that Low CSR firms with High VEGA target CEOs specifically perform better in corporate control contests in later years. We justify this as Low CSR firms are characterized by lower governance and more agency costs where management seeks benefit its own interests instead of being considerate for the stakeholders at large.
Managerial Incentives And Corporate Acquisitions
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Author : Athanasios Tsekeris
language : en
Publisher:
Release Date : 2015
Managerial Incentives And Corporate Acquisitions written by Athanasios Tsekeris and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
This thesis examines the impact of executive compensation on the quality of corporate acquisition decisions. A number of different issues are empirically investigated. The analysis begins with the examination of the relation between the incentives managers are provided with via their compensation contracts and the riskiness of mergers and acquisitions (M&As) investigating whether this relation is affected by the passage of the Sarbanes-Oxley Act (SOX) in 2002. The study then focuses on the performance of acquiring firms exploring how and whether managerial incentives can induce value-increasing acquisitions conditional on the intensity of M&A activity. The final part of the empirical analysis examines whether the legal status of the target firm has any implications for the effectiveness of incentive compensation to mitigate managerial risk-aversion and increase shareholder value. The thesis contributes both to academic literature and to practice by identifying areas of inefficiencies of equity-based compensation contracts to mitigate agency costs. More specifically, new evidence is provided on the effectiveness of incentive compensation to induce risk-taking activity under the impact of stricter regulation. While compensation-related incentives are positively associated with the riskiness of acquisition decisions before 2002, managers have become considerably less responsive to such incentives after the enactment of SOX. Moreover, although incentive compensation can improve deal performance and overcome adverse selection concerns by inducing managers to acquire when it is optimal to do, it is not related to value-increasing decisions when acquisitions are initiated during periods of merger waves. It is further found that equity-based compensation can be rendered ineffective to mitigate agency costs when a publicly listed firm is acquired. Given these inefficiencies, a number of recommendations are made for the improvement of the design of executive compensation contracts that could provide valuable guidelines to remuneration committees to reduce excessive compensation costs and benefit shareholders.
Mergers Motivation And Directors Remuneration
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Author : Peter Abell
language : en
Publisher:
Release Date : 1994
Mergers Motivation And Directors Remuneration written by Peter Abell and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with Chief executive officers categories.
European Mergers And Merger Policy
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Author : Matthew Bishop
language : en
Publisher: Oxford University Press, USA
Release Date : 1993
European Mergers And Merger Policy written by Matthew Bishop and has been published by Oxford University Press, USA this book supported file pdf, txt, epub, kindle and other format this book has been release on 1993 with Business & Economics categories.
Growing trade in Europe--accelerated by the "Single Market" program--has seen a sharp increase in international mergers between European-based firms. This increase in European mergers will almost certainly continue, raising important questions for industrial policymakers and businessstrategies. This book addresses these questions, bringing together a number of leading economists and authoritative commentators on mergers and merger policy.
Mergers Executive Compensation And Post Merger Performance Of Acquiring Firms
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Author : L. Goh
language : en
Publisher:
Release Date : 2006
Mergers Executive Compensation And Post Merger Performance Of Acquiring Firms written by L. Goh and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
2020 Mergerstat Review
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Author : FACTSET MERGERSTAT.
language : en
Publisher: BVResources
Release Date : 2020-04-25
2020 Mergerstat Review written by FACTSET MERGERSTAT. and has been published by BVResources this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-04-25 with categories.
The FactSet Mergerstat Review is the cornerstone of any mergers and acquisitions library. This must-have resource delivers comprehensive rosters, data and statistics on merger and acquisition (M&A) transactions that involve U.S. companies, including privately held, publicly traded and cross-border transactions, and also lists unit divestitures, management buyouts, and certain asset sales.
The Economics Of The Business Firm
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Author : Harold Demsetz
language : en
Publisher: Cambridge University Press
Release Date : 1997
The Economics Of The Business Firm written by Harold Demsetz and has been published by Cambridge University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 1997 with Business & Economics categories.
The essays in this volume discuss the theory of the business firm and its applications in economics.