What's in it for Me? Personal Benefits Obtained by CEOS Whose Firms are Acquired
Jay C. Hartzell
University of Texas at Austin - Department of Finance
New York University (NYU) - Department of Finance
New York University (NYU) - Stern School of Business
Presented at Tuck-JFE Contemporary Corporate Governance Conference
We study benefits received by target company CEOs in completed mergers and acquisitions. These executives obtain wealth increases with a median of $4 to $5 million and a mean of $8 to $11 million, roughly in line with the permanent income streams that they sacrifice. CEOs receive lower financial gains from those transactions in which they become executives of the buyer, suggesting that tradeoffs exist between the financial and career-related benefits they extract. Regression estimates suggest that target shareholders receive lower acquisition premia in transactions that involve extraordinary personal treatment of the CEO.
Number of Pages in PDF File: 32
Keywords: Takeovers, acquisitions
JEL Classification: G34, J44
Date posted: July 24, 2000
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