Over the past decades, the total value of executive compensation packages has been rising dramatically, contributing to a wider pay gap between the chief executive officer and the average worker. In the midst of the financial turmoil that brought about a massive wave of corporate failures, the lavish executive compensation package has come under an intense spotlight. Public pressure has mounted to revise the levels and the structure of executive pay in a way that will tie more closely the executive wealth to that of shareholders. Merger and acquisition (M&A) activities represent an opportune setting for gauging whether shareholder value creation or managerial opportunism guides executive compensation. M&As constitute major examples of high-profile events prompted by managers who typically conceive them as a means for achieving higher levels of pay, even though they are frequently associated with disappointing returns to acquiring shareholders.
Mergers and Acquisitions and Executive Compensation reviews the existing empirical evidence and provides an integrative framework for the growing body of literature that is situated at the intersection of two highly debated topics: M&A activities and executive compensation. The proposed framework structures the literature along two dimensions, such as M&A phases and firm’s role in a M&A deal, allowing readers to identify three main streams of research and five different conceptualizations of causal relationships between M&A transactions and executive compensation.
The book makes a comprehensive review of empirical studies conducted to date, aiming to shed more light on the current and emerging knowledge in this field of investigation, discuss the inconsistencies encountered within each stream of research, and suggest promising directions for further exploration. This book will appeal to researchers and students alike in the fields of organizational behavior and governance as well as accounting and accountability.
List of Figures List of Tables List of Abbreviations Preface Part I: Overview of M&As and Executive Compensation 1. M&A Activities: Global Portrait and Merger Motives 2. Incentive Design of Executive Compensation Packages 3. Conceptual Framework Linking M&As with Executive Compensation Part II: Bidders’ Executive Compensation before the Deal 4. Impact of Bidding Executive Compensation on Bidder-Specific M&A Occurrence 5. Impact of Bidding Executive Compensation on M&A Characteristics Part III: Targets’ Executive Compensation before the Deal 6. Impact of Target-Specific M&A Occurrence (Threat of Takeover) on Target Executive Compensation 7. Impact of Target Executive Compensation on M&A Characteristics Part IV: Acquirers’ Executive Compensation after the Deal 8. Impact of M&A Characteristics on Executive Compensation of Acquiring Firms Part V: Discussion and Priorities for Future Research 9. Discussion of Extant Knowledge on M&As and Executive Compensation 10. Priorities for Future Research Endeavors in the Field About the Authors Index
Corporate Governance can be defined as the system of policies, practices, actions and processes by which an organization is lead and managed. Corporate Governance theory examines balancing the interests of the many stakeholders within an organization and the societies in which it operates. This series looks at different systems of Corporate Governance as well examining stakeholder perspectives, including shareholders, management, leadership, customers, suppliers and financiers, encompassing practically every sphere of management. This series publishes cutting edge and definitive coverage of all key topics in Corporate Governance and related interdisciplinary areas including but not limited to; Management Strategy; Leadership; International Business and Economics; Organizational Behavior; Business Ethics; Entrepreneurship; Accounting and Finance.