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Managerial Incentives Explanation of Equity Carve-Outs Initial Returns

Seistrajkova, Biljana - 2017

This paper studies the first day return of 227 carve-outs during 1996-2013. I find that the first day return of newly issued subsidiary stocks is explained by the reporting distortions in the pre IPO period, conditioned on whether the executives and directors of the subsidiary received stock...

Persistent link: https://www.econbiz.de/10012970504

Playing It Safe? Managerial Preferences, Risk, and Agency Conflicts

Gormley, Todd A. - 2016

This article examines managers' incentive to play it safe. We find that, after managers are insulated by the adoption of an antitakeover law, they take value-destroying actions that reduce their firms' stock volatility and risk of distress. To illustrate one such action, we show that managers...

Persistent link: https://www.econbiz.de/10013006191

Perverse incentives of special purpose acquisition companies, the "poor man's private equity funds"

Dimitrova, Lora - In: Journal of accounting & economics 63 (2017) 1, pp. 99-120

Persistent link: https://www.econbiz.de/10011689395

Mergers, managerial incentives, and efficiencies

Jovanovic, Dragan - 2014 - [rev.]

We analyze the effects of synergies from horizontal mergers in a Cournot oligopoly where principals provide their agents with incentives to cut marginal costs prior to choosing output. We stress that synergies come at a cost which possibly leads to a countervailing incentive effect: The merged...

Persistent link: https://www.econbiz.de/10010360044

Deciphering Private Equity Incentive Contracting and Fund Leverage Choice

Riddiough, Timothy J. - 2021

I explain the standard carried interest contract as a mechanism to induce incentive compatible fund leverage while also satisfying LP return objectives. Fee, leverage and target return data from private equity real estate (PERE) funds are used to calibrate the model. Steps in the modeling...

Persistent link: https://www.econbiz.de/10013215169

Merger performance and managerial incentives

Kräkel, Matthias; Müller, Daniel - 2014

We consider a two-stage principal-agent model with limited liability in which a CEO is employed as agent to gather information about suitable merger targets and to manage the merged corporation in case of an acquisition. Our results show that the CEO systematically recommends targets with low...

Persistent link: https://www.econbiz.de/10011430291

Merger efficiency and managerial incentives

Kräkel, Matthias; Müller, Daniel - 2013

Persistent link: https://www.econbiz.de/10010198514

Structural Investigation of Acquiring Managers' Incentives in Takeovers

Li, Di - 2012

This paper quantifies the degree of agency conflicts in acquiring firms. By estimating managerial valuations using a structural method and calculating shareholder valuations from stock market reactions to takeovers, I find that acquiring managers overvalue targets by 63% of target...

Persistent link: https://www.econbiz.de/10013109126

Entrenchment or Incentive? CEO Employment Contracts and Acquisition Decisions

Zhao, Jing - 2013

A long-standing controversy is whether CEO employment contracts insulate inferior managers from discipline leading to shareholder wealth destruction, or whether contracts alleviate managerial risk aversion and encourage value-enhancing decisions. Using a unique dataset on S&P 500 CEO employment...

Persistent link: https://www.econbiz.de/10013083291

Golden Parachutes, Takeover Incentive, and Risk-Taking

Chen, Dong - 2014

-taking. These results are consistent with the “takeover incentive hypothesis,” an original proposition stating that GPs influence … risk-taking through the incentive of a CEO with a GP to accept a takeover, as well as delta's role in affecting the weight … of the CEO's incentive to maximize the expected takeover-associated equity portfolio wealth. The findings do not support …

Persistent link: https://www.econbiz.de/10013065544

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