Stock Performance or Entrenchment? The Effects of Mergers and Acquisitions on CEO Compensation

  title={Stock Performance or Entrenchment? The Effects of Mergers and Acquisitions on CEO Compensation},
  author={P. Kumar and L. Kuo and Latha Ramchand},
  journal={Econometric Modeling: Corporate Finance & Governance eJournal},
  • P. Kumar, L. Kuo, Latha Ramchand
  • Published 2012
  • Business
  • Econometric Modeling: Corporate Finance & Governance eJournal
  • Using a large sample of U.S. acquiring and non-acquiring firms and covering a broad sample of transactions, we examine the effects of mergers and acquisitions (M&A) on CEO compensation during 1993-2006, a period of intense M&A activity. We alleviate endogeneity concerns through dynamic panel data estimation, propensity score matching, and using a natural experiment of exogenous accounting regulatory changes in 2001 that significantly affected the benefits of stock-financed acquisitions. The… CONTINUE READING
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