Board structure, mergers, and shareholder wealth: A study of the mutual fund industry

• 成果类型: Article
• 署名作者: Khorana, Ajay; Tufano, Peter; Wedge, Lei
• 署名单位: Harvard University; University System of Georgia; Georgia Institute of Technology; State University System of Florida; University of South Florida
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2006.05.002
• 发表日期: 2007
• 页码: 571-598
• 关键词: mutual funds; mergers; governance

摘要

We study mutual fund mergers between 1999 and 2001 to understand the role and effectiveness of fund boards. Some fund mergers-typically across-family mergers-benefit target shareholders but are costly to target fund directors. Such mergers are more likely when funds underperform and their boards have a larger percentage of independent trustees, suggesting that more-independent boards tolerate less underperformance before initiating across-family mergers. This effect is most pronounced when all of the fund's directors are independent, not the 75% level of independence required by the SEC. Higher-paid target fund boards are less likely to approve across-family mergers that cause substantial reductions in their compensation. (C) 2006 Elsevier B.V. All rights reserved.