DO THEY WALK THE TALK? GAUGING ACQUIRING CEO AND DIRECTOR CONFIDENCE IN THE VALUE CREATION POTENTIAL OF ANNOUNCED ACQUISITIONS

• 成果类型: Article
• 署名作者: Devers, Cynthia E.; McNamara, Gerry; Haleblian, Jerayr; Yoder, Michele E.
• 署名单位: Michigan State University; Michigan State University's Broad College of Business; University System of Georgia; University of Georgia; University of Michigan System; University of Michigan Dearborn
• 刊物名称: ACADEMY OF MANAGEMENT JOURNAL
• ISSN/ISSBN: 0001-4273
• DOI: 10.5465/amj.2011.0555
• 发表日期: 2013
• 页码: 1679-1702
• 关键词: EARLY-MOVER ADVANTAGES; executive-compensation; firm performance; POSTACQUISITION PERFORMANCE; AGENCY COSTS; risk-taking; STOCK; INFORMATION; management; merger

摘要

We explore whether acquiring CEOs and directors act consistently with the idea that their newly announced acquisitions will increase long-term firm; value. Specifically, we examine postannouncement adjustments to CEOs' equity-based holdings and find acquiring CEOs tend to exercise options and sell firm stock following acquisition announcements. Moreover, positive short-term market performance exacerbates this effect. Further, we find directors tend to grant their acquiring CEOs stock options, after acquisition announcement, presumably to more tightly align CEO-shareholder interests. These findings suggest that when CEOs and directors manage acquiring CEOs' equity-based holdings, they do not appear to anticipate long-term value creation from their acquisitions.