Bidder CEO and Other Executive Compensation in UK M&As

23 Pages Posted: 11 Aug 2006

See all articles by Stavroula Iliopoulou

Stavroula Iliopoulou

University of Essex

Jerry Coakley

University of Essex - Essex Business School

Abstract

This paper investigates the impact of M&As on bidder (CEO and other) executive compensation employing a unique sample of 100 completed bids in the UK over the 1998-2001 period. Our findings indicate that less independent and larger boards award CEOs significantly higher bonuses and salary following M&A completion both for the full sample and for the UK and US sub-samples. UK CEOs and executives are rewarded more for the effort exerted in accomplishing intraindustry or large mergers than for diversifying or small mergers and their cash pay is unaffected by other measures of their managerial skill or performance. US bidders are rewarded at higher levels than their UK counterparts and their remuneration is related only to measures of CEO dominance over the board of directors. Overall our findings offer support for the managerial power rather than the agency theory perspective on managerial compensation.

Suggested Citation

Iliopoulou, Stavroula and Coakley, Jerry, Bidder CEO and Other Executive Compensation in UK M&As. European Financial Management, Vol. 12, No. 4, pp. 609-631, September 2006. Available at SSRN: https://ssrn.com/abstract=923686 or http://dx.doi.org/10.1111/j.1468-036X.2006.00333.x

Stavroula Iliopoulou

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Jerry Coakley (Contact Author)

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom
+44 1206 872455 (Phone)
+44 1206 873429 (Fax)

HOME PAGE: http://www.essex.ac.uk/afm/staff/coakley.shtm

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