Author: J. HuangPublisher:
ISBN:
Category :
Languages : en
Pages : 100
Book Description
Impact of Managerial Incentives on Shareholder Value Creation in Mergers and Acquisitions
Author: J. HuangManagerial Incentives and Corporate Acquisitions
Author: Athanasios TsekerisPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This thesis examines the impact of executive compensation on the quality of corporate acquisition decisions. A number of different issues are empirically investigated. The analysis begins with the examination of the relation between the incentives managers are provided with via their compensation contracts and the riskiness of mergers and acquisitions (M&As) investigating whether this relation is affected by the passage of the Sarbanes-Oxley Act (SOX) in 2002. The study then focuses on the performance of acquiring firms exploring how and whether managerial incentives can induce value-increasing acquisitions conditional on the intensity of M&A activity. The final part of the empirical analysis examines whether the legal status of the target firm has any implications for the effectiveness of incentive compensation to mitigate managerial risk-aversion and increase shareholder value. The thesis contributes both to academic literature and to practice by identifying areas of inefficiencies of equity-based compensation contracts to mitigate agency costs. More specifically, new evidence is provided on the effectiveness of incentive compensation to induce risk-taking activity under the impact of stricter regulation. While compensation-related incentives are positively associated with the riskiness of acquisition decisions before 2002, managers have become considerably less responsive to such incentives after the enactment of SOX. Moreover, although incentive compensation can improve deal performance and overcome adverse selection concerns by inducing managers to acquire when it is optimal to do, it is not related to value-increasing decisions when acquisitions are initiated during periods of merger waves. It is further found that equity-based compensation can be rendered ineffective to mitigate agency costs when a publicly listed firm is acquired. Given these inefficiencies, a number of recommendations are made for the improvement of the design of executive compensation contracts that could provide valuable guidelines to remuneration committees to reduce excessive compensation costs and benefit shareholders.
M & A for Value Creation in Japan
Author: Yasuyoshi KurokawaPublisher: World Scientific
ISBN: 9814287466
Category : Business & Economics
Languages : en
Pages : 152
Book Description
Investigates the impact of a takeover on a management's incentives to increase reported earnings. This book analyzes the type of effects reorganizations have on the laws and regulations, while weighing the company law, accounting standards for financial instruments, tax law, other accounting principles and international standards.
Managerial Entrenchment and the Valuation Effects of Toehold Acquisitions
Author: Jeongsun YunPublisher:
ISBN:
Category :
Languages : en
Pages : 29
Book Description
This paper examines the market reactions to toehold acquisitions to determine whether and under what circumstances the formation of a new large outside shareholder contributes to the shareholder value of the firm. We argue that although toehold acquisitions signal imminent challenges to the control of the management of the target firms, the challenges do not necessarily contribute to the shareholder value if the management is likely to resist ferociously. We find that while voting premium increases in response to toehold acquisitions for the entire sample, it depends on firm characteristics such as dual class stocks and the asset size whether shareholder value increases. Dual class targets exhibit a positive market reaction only if the controlling shareholders do not have sufficient corporate resources under their control, whereas single class targets show a significantly positive cumulative abnormal return regardless of the asset size. The results are consistent with the hypothesis that dual-class stocks are an outcome of the managerial incentives for entrenchment.
Creating Shareholder Value
Author: Alfred RappaportPublisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 304
Book Description
Begins with dramatic proof of the shortcomings of accounting numbers as earnings per share, return on investment, and return on equity, and explains to develop value-creating business strategies and how to ...
The Role of Managerial Incentives in Corporate Acquisitions and Corporate Mergers and Top Management Turnover
Author: David Scott NorthPublisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 252
Book Description
The Effect of Mergers and Acquisitions on Managerial Incentives and Performance
Author: Bryant B. PlavsicPublisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 254
Book Description
An Analysis of Managerial Incnetives [sic] in Mergers and the Effects of Incentive Compensation Contracts on Managerial Decisions and on Shareholder Value
![An Analysis of Managerial Incnetives [sic] in Mergers and the Effects of Incentive Compensation Contracts on Managerial Decisions and on Shareholder Value PDF](https://books.google.com/books/content/images/frontcover/jErmuQEACAAJ?fife=w80-h100)
Author: Shu-Ling Wang (Student.)Publisher:
ISBN:
Category : Compensation management
Languages : en
Pages : 120
Book Description
Managerial Incentives and the Price Effects of Mergers
Author: Abraham L. WickelgrenPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
Most analysis of market power assumes that managers are perfect agents for shareholders. This paper relaxes that assumption. When managers of a multi-product firm exert unobservable effort to improve product quality, there is a trade-off between providing adequate effort incentives and ensuring sufficient price-coordination between the product divisions. This makes some intra-firm price competition optimal, explaining why many multi-product firms allow for competition between divisions. When there are effort spillovers, the optimal amount of price competition can be as great as when the products are under separate ownership. Even with some profit-sharing, intra-firm price competition can reduce quality-adjusted price, which has important implications for antitrust policy.
Author: Nicolas Mottis