Earnouts: A study of financial contracting in acquisition agreements

• 成果类型: Article
• 署名作者: Cain, Matthew D.; Denis, David J.; Denis, Diane K.
• 署名单位: Purdue University System; Purdue University; University of Notre Dame
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2010.05.001
• 发表日期: 2011
• 关键词: compensation contracts; executive-compensation; share contracts; DEBT CONTRACTS; moral hazard; AGENCY COSTS; corporate; performance; INFORMATION; OWNERSHIP

摘要

We empirically examine earnout contracts, which provide for contingent payments in acquisition agreements. Our analysis reveals considerable heterogeneity in the potential size of the earnout, the performance measure on which the contingent payment is based, the period over which performance is measured, the form of payment for the earnout, and the overall sensitivity of earnout payment to target performance. Our tests of the determinants of contract terms yield support for the view that earnouts are structured to minimize the costs of valuation uncertainty and moral hazard in acquisition negotiations. (C) 2010 Elsevier B.V. All rights reserved.