Impact Of Managerial Incentives On Shareholder Value Creation In Mergers And Acquisitions
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Managerial Incentives and Corporate Acquisitions
Author | : Athanasios Tsekeris |
Publisher | : |
Total Pages | : 0 |
Release | : 2015 |
Genre | : |
ISBN | : |
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.
The Art of Capital Restructuring
Author | : H. Kent Baker |
Publisher | : John Wiley & Sons |
Total Pages | : 612 |
Release | : 2011-07-28 |
Genre | : Business & Economics |
ISBN | : 1118030354 |
The most up-to-date guide on making the right capital restructuring moves The Art of Capital Restructuring provides a fresh look at the current state of mergers, acquisitions, and corporate restructuring around the world. The dynamic nature of M&As requires an evolving understanding of the field, and this book considers several different forms of physical restructuring such as divestitures as well as financial restructuring, which refers to alterations in the capital structure of the firm. The Art of Capital Restructuring not only explains the financial aspects of these transactions but also examines legal, regulatory, tax, ethical, social, and behavioral considerations. In addition to this timely information, coverage also includes discussion of basic concepts, motives, strategies, and techniques as well as their application to increasingly complex, real-world situations. Emphasizes best practices that lead to M&A success Contains important and relevant research studies based on recent developments in the field Comprised of contributed chapters from both experienced professionals and academics, offering a variety of perspectives and a rich interplay of ideas Skillfully blending theory with practice, this book will put you in a better position to make the right decisions with regard to capital restructuring in today's dynamic business world.
M & A for Value Creation in Japan
Author | : Yasuyoshi Kurokawa |
Publisher | : World Scientific |
Total Pages | : 152 |
Release | : 2010 |
Genre | : Business & Economics |
ISBN | : 9814287466 |
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 Yun |
Publisher | : |
Total Pages | : 29 |
Release | : 2008 |
Genre | : |
ISBN | : |
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 Rappaport |
Publisher | : |
Total Pages | : 304 |
Release | : 1986 |
Genre | : Business & Economics |
ISBN | : |
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 North |
Publisher | : |
Total Pages | : 252 |
Release | : 2000 |
Genre | : Consolidation and merger of corporations |
ISBN | : |
2020 Mergerstat Review
Author | : FACTSET MERGERSTAT. |
Publisher | : BVResources |
Total Pages | : |
Release | : 2020-04-25 |
Genre | : |
ISBN | : 9781621501954 |
The FactSet Mergerstat Review is the cornerstone of any mergers and acquisitions library. This must-have resource delivers comprehensive rosters, data and statistics on merger and acquisition (M&A) transactions that involve U.S. companies, including privately held, publicly traded and cross-border transactions, and also lists unit divestitures, management buyouts, and certain asset sales.
An Analysis of Managerial Incnetives [sic] in Mergers and the Effects of Incentive Compensation Contracts on Managerial Decisions and on Shareholder Value
Author | : Shu-Ling Wang (Student.) |
Publisher | : |
Total Pages | : 120 |
Release | : 1993 |
Genre | : Compensation management |
ISBN | : |
Merger Decisions
Author | : Federal Deposit Insurance Corporation |
Publisher | : |
Total Pages | : 196 |
Release | : |
Genre | : Bank mergers |
ISBN | : |