Is non-executive directors’ pay or industry expertise related to takeover premiums, abnormal returns and offer price revisions?

Bugeja, M; Matolcsy, Z; Mehdi, W; Spiropoulos, H

Is non-executive directors’ pay or industry expertise related to takeover premiums, abnormal returns and offer price revisions?

Bugeja, M

Matolcsy, Z

Mehdi, W Spiropoulos, H

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Publication Type:: Journal Article
Citation:: Australian Journal of Management, 2017, 42 (3), pp. 355 - 375
Issue Date:: 2017-08-01

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Field	Value	Language
dc.contributor.author	Bugeja, M https://orcid.org/0000-0002-1941-5092	en_US
dc.contributor.author	Matolcsy, Z https://orcid.org/0000-0001-6566-5079	en_US
dc.contributor.author	Mehdi, W	en_US
dc.contributor.author	Spiropoulos, H https://orcid.org/0000-0002-7748-6577	en_US
dc.date.available	2016-03-14	en_US
dc.date.issued	2017-08-01	en_US
dc.identifier.citation	Australian Journal of Management, 2017, 42 (3), pp. 355 - 375	en_US
dc.identifier.issn	0312-8962	en_US
dc.identifier.uri	http://hdl.handle.net/10453/124276
dc.description.abstract	© 2016, © The Author(s) 2016. We examine the association between various takeover outcomes and bidding firm non-executive directors’ (NEDs) compensation and expertise in the target firm industry. In our sample of 272 acquisitions by ASX listed firms between 2004 and 2011, we find that NEDs’ relative compensation and industry expertise have a negative association with the bid premium. We also find that NEDs’ relative compensation is positively associated with the bidding firm’s market reaction to the takeover announcement, and NEDs’ industry expertise is associated with a lower likelihood of an increase in the offer price, particularly for M&As viewed negatively by the market. These results are consistent with higher NEDs’ relative compensation and industry expertise leading to more effective board monitoring and advising.	en_US
dc.relation.ispartof	Australian Journal of Management	en_US
dc.relation.isbasedon	10.1177/0312896216643566	en_US
dc.title	Is non-executive directors’ pay or industry expertise related to takeover premiums, abnormal returns and offer price revisions?	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	42	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	15 Commerce, Management, Tourism and Services	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	open_access
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	42	en_US

Abstract:

© 2016, © The Author(s) 2016. We examine the association between various takeover outcomes and bidding firm non-executive directors’ (NEDs) compensation and expertise in the target firm industry. In our sample of 272 acquisitions by ASX listed firms between 2004 and 2011, we find that NEDs’ relative compensation and industry expertise have a negative association with the bid premium. We also find that NEDs’ relative compensation is positively associated with the bidding firm’s market reaction to the takeover announcement, and NEDs’ industry expertise is associated with a lower likelihood of an increase in the offer price, particularly for M&As viewed negatively by the market. These results are consistent with higher NEDs’ relative compensation and industry expertise leading to more effective board monitoring and advising.

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http://hdl.handle.net/10453/124276