This paper shows that some managers systematically pay higher wages to rank-and-file workers and these managers are targets of M&As. We use a manager-firm-worker matched dataset covering the entire population of Denmark from 1995 to 2011, and develop a novel framework to identify manager fixed...

Unscheduled stock options to target CEOs are a non-trivial phenomenon during private merger negotiations. In 920 acquisition bids during 1999-2007, over 13% of targets grant them. These options substitute for golden parachutes and compensate target CEOs for benefits they forfeit because of the...

Do merger bonuses to target CEOs facilitate a wealth transfer from target to acquirer shareholders? We test this hypothesis against an alternative that bonuses enable a useful contractual revision in compensation contracts when takeovers generate small synergies. When target CEOs get a merger...

After a merger, company officials face the challenge of making compensation schemes uniform and of redesigning teams with managers from companies with different incentives, work habits and recruiting methods. In this paper, we investigate the relationship between executive pay and performance...

After a merger, company officials face the challenge of making compensation schemes uniform and of redesigning teams with managers from companies with different incentives, work habits and recruiting methods. In this paper, we investigate the relationship between executive pay and performance...

This paper investigates the impact of the target chief executive officer’s (CEO) postmerger position on the purchase premium and target shareholders’ abnormal returns around the announcement of the deal in a sample of bank mergers during the period 1990–2004. We find evidence that the...

Executive pensions and deferred compensation, collectively referred to as inside debt, tend to align CEO incentives with those of debt holders. Although CEO equity compensation is well known to induce risk-shifting incentives and thereby add to the agency cost of debt, too much inside debt may...

We examine the impact of acquisitions by UK acquirers on executive pay. The overall sample shows a significant transitory pay increase. Pay changes are not affected by target nationality or organizational form, although initial cross-border acquisitions result in higher pay. Pay increases are...

This paper examines the mechanisms by which acquirer CEOs are incentivized and their impact on merger decisions. We argue that the pre-merger structure of CEO wealth impacts a CEO's risk tolerance and ultimately her willingness to undertake a merger as well as the framework of the deal. As the...

We find that differences in the compensation of acquirer and target firms' management teams negatively affect the outcomes of mergers. Larger differences in top management pay are associated with lower returns to the acquiring firm after the announcement of the merger and negative combined...