Equity grants to target CEOs during deal negotiations

• 成果类型: Article
• 署名作者: Heitzman, Shane
• 署名单位: University of Rochester
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2011.06.004
• 发表日期: 2011
• 页码: 251-271
• 关键词: mergers; acquisitions; bargaining; Negotiation; COMPENSATION; governance

摘要

I investigate the determinants and consequences of granting equity to the target's Chief Executive Officer (CEO) during deal negotiations. These negotiation grants likely reflect information about the acquisition, benefit from the deal premium, and provide more timely bargaining incentives. I find that CEOs are more likely to receive equity during negotiations when they negotiate for the target, particularly when the target has more bargaining power. This suggests that boards use equity to enhance bargaining incentives for CEOs with the most influence over deal price. I find limited evidence that negotiation grants are used as compensation and no evidence that they have a material adverse effect on shareholders. (C) 2011 Elsevier B.V. All rights reserved.