Executive compensation and corporate acquisition decisions

• 成果类型: Article
• 署名作者: Datta, S; Iskandar-Datta, M; Raman, K
• 署名单位: Bentley University; Suffolk University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/0022-1082.00406
• 发表日期: 2001
• 页码: 2299-2336
• 关键词: LONG-RUN PERFORMANCE; stock returns; OWNERSHIP; MARKET; plans; FIRMS; INVESTMENT; dividend; RISK

摘要

By examining how executive compensation structure determines corporate acquisition decisions, we document a strong positive relation between acquiring managers' equity-based compensation (EBC) and stock price performance around and following acquisition announcements. This relation is highly robust when we control for acquisition mode (mergers), means of payment, managerial ownership, and previous option grants. Compared to low EBC managers, high EBC managers pay lower acquisition premiums, acquire targets with higher growth opportunities, and make acquisitions engendering larger increases in firm risk. EBC significantly explains postacquisition stock price performance even after controlling for acquisition mode, means of payment, and glamour versus value acquirers.