|
|
|
|
||||
|
||||
Endogenous Contracting in Compensation: Evidence from Merger Bonuses to Target CEOsEliezer M. FichDrexel University - Department of Finance Edward M. RiceUniversity of Washington - Michael G. Foster School of Business Anh L. TranCass Business School, City University London May 3, 2013 Abstract: Several papers find that when target CEOs get extra benefits during mergers, takeover premiums are lower. This is interpreted as a conflict of interest: target CEOs sacrifice premiums for personal gain, facilitating a wealth transfer from target to acquirer shareholders. We examine merger bonuses and find evidence inconsistent with wealth transfer. Results indicate that when target CEOs get bonuses, acquirers pay less but also get less in the form of low synergies. The evidence suggests that bonuses arise endogenously when takeovers generate small synergy gains helping firms circumvent conflicts of interests between target CEOs and their shareholders.
Number of Pages in PDF File: 49 Keywords: Merger bonus, Acquisitions, Synergies JEL Classification: G30, G34, J33 working papers seriesDate posted: September 2, 2012 ; Last revised: May 5, 2013Suggested CitationContact Information
|
|
|||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo2 in 0.468 seconds
