Discover the path to CEO pay rise : a study on how changes in M&A characteristics affect CEO compensation.

• Main Authors: Ho, Carmen Jia Min., Ko, Mui Hung., Lim, Hui Yun.
• Other Authors: Tham Tze Minn
• Format: Final Year Project
• Language: English
• Published: 2012
• Subjects: DRNTU::Business::Finance::Mergers and acquisitions; DRNTU::Business::Management::Leadership
• Online Access: http://hdl.handle.net/10356/48305
• Institution: Nanyang Technological University

This study highlights two highly controversial topics, specifically, executive compensation and mergers and acquisitions. We examine the effects of changes in M&A characteristics (firm performance, growth opportunities and liquidity) on changes in acquiring firm’s CEO compensation. Our sample consists of 313 acquisitions involving United States publicly-listed companies during the period 1998 to 2004. The empirical tests support our hypotheses that firm performance and liquidity have a significant positive association with changes in total compensation. We also prove that firm performance has a significant positive relationship with changes in stock options. Further analysis shows that significant variables affecting changes in total compensation are mainly driven by large deal size in the context of stock acquisitions.