Pay for Performance? CEO Compensation and Acquirer Returns in BHCs
We examine the impact of managerial incentives on acquisitions in the banking industry. We find that banks whose CEOs have higher pay-for-performance sensitivity (PPS) are less likely to engage in value- reducing acquisitions. Conditional on engaging in acquisitions, those higher-PPS banks have significantly better announcement returns: on average these banks outperform the acquires in the lower-PPS group by 1.2％ in a three-day window around the announcement. The positive market reaction can be rationalized by long-term performance. Following acquisitions, banks with high PPS experience greater improvement in their operating performance as measured by ROA.
Pay-for-Performance Sensitivity CEO Compensation Acquirer Returns Bank Mergers
Kristina Minnick Haluk Unal Liu Yang
Bentley College University of Maryland and Center for Financial Research, FDIC Anderson School of Management, UCLA
国际会议
广州
英文
1-33
2009-07-07（万方平台首次上网日期，不代表论文的发表时间）