To examine the role of executive compensation in corporate acquisition decisions, we compare the compensation of top executives in two groups of firms: firms undertaking large acquisitions and a control sample of non-acquirors. Before the acquisition, we find a positive relation between firm...

We analyze the effect of financing announcements of highly leveraged transactions (HLTs) on the stock prices of the banks that lead HLT-lending syndicates. Our sample of HLT financing announcements consists of 29 leveraged buyouts and 12 leveraged recapitalizations representing 76 bank financing...

Jensen (1986), among others, suggests that executives may increase firm size beyond the optimum because executive compensation relates positively to firm size. We test this hypothesis by (i) analyzing changes in executive compensation around large acquisitions, and (ii) by comparing executive...

CEO compensation has been much debated in the 1990s, both in academic circles and in the media. We contrast two views on CEO compensation. The first view is that there has been a very positive trend in CEO compensation - that compensation committees have become more responsive to shareholder...

In 1992-1993, the SEC required enhanced disclosure on executive compensation and Congress enacted tax legislation, i.e. Internal Revenue Code Section 162(m), limiting the deductibility of non-performance related compensation over one million dollars. We examine the effects of these regulatory...

CEO compensation has been much debated in the 1990s, both in academic circles and in the media. We contrast two views on CEO compensation. The first view is that there has been a very positive trend in CEO compensation, that compensation committees have become more responsive to shareholder...