HomRoy, Swarnodeep (2012) Impact of Acquisition on CEO Pay. Journal of Business and Economic Statistics . ISSN 0735-0015, ESSN: 1537-2707 (In Press)
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Abstract
We examine the impact of acquisition on the pay of CEOs of S&P 1500 rms from 1994-2010. We nd insigni cant e¤ect of rm performance on post-acquisition CEO pay. Controlling for rm size, CEOs are paid about 3.5-4% premium in post-acquisition pay, which increases the pay of the median CEO of an acquiring rm in the sample by US$ 1,73,000. We nd no evidence of di¤erential pay increase for domestic and international acquisitions. Post-acquisition increase in CEO pay is not contingent on the wealth e¤ects and CEOs are not penalized for wealth-reducing acquisitions. Our results suggest that a part of acquisition premium in CEO pay can be attributed to the strength of governance. Controlling for survivor bias, we observe a smaller acquisition premium in CEO pay.
| Item Type: | Article |
|---|---|
| ID Code: | 3051 |
| Deposited On: | 13 Dec 2012 12:23 |
| Last Modified: | 13 Dec 2012 12:27 |
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