How Does Acquisition Experience Affect Managerial Career Outcomes?

Journal of Financial and Quantitative Analysis, Forthcoming

60 Pages Posted: 22 Dec 2017 Last revised: 22 May 2020

See all articles by Daniel Greene

Daniel Greene

Clemson University

Jared D. Smith

North Carolina State University - Poole College of Management

Date Written: May 21, 2020

Abstract

We use hand-collected data from acquisition press releases to investigate how acquisition experience affects the career outcomes of non-CEO senior managers. To address the non-random nature of gaining experience, we separately use manager and firm-year fixed effects, as well as an instrumental variable analysis. Acquisition experience is positively related to compensation, the likelihood of a future board seat, and the likelihood of promotion to CEO. Further tests suggest that the effects of experience decay over time, have diminishing returns, and do not depend on deal quality. Finally, we search SEC filings to document novel information on managerial roles in M&As.

Keywords: Senior Managers, Promotion, Compensation, Board of Directors, Labor Markets, Experience, Mergers and Acquisitions

JEL Classification: G30, G34, L22, M51

Suggested Citation

Greene, Daniel and Smith, Jared D., How Does Acquisition Experience Affect Managerial Career Outcomes? (May 21, 2020). Journal of Financial and Quantitative Analysis, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3092201 or http://dx.doi.org/10.2139/ssrn.3092201

Daniel Greene (Contact Author)

Clemson University ( email )

101 Sikes Ave
Clemson, SC 29634
United States

Jared D. Smith

North Carolina State University - Poole College of Management ( email )

Nelson Hall
Raleigh, NC 27695-8614
United States

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