CEO compensation from M&As in Australia

Bugeja, M; Da Silva Rosa, R; Duong, L; Izan, H

CEO compensation from M&As in Australia

Bugeja, M

Da Silva Rosa, R Duong, L Izan, H

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Publisher:: AFAANZ
Publication Type:: Conference Proceeding
Citation:: 2010 AFAANZ Conference Website, 2010, pp. 1 - 27
Issue Date:: 2010-01

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Field	Value	Language
dc.contributor.author	Bugeja, M https://orcid.org/0000-0002-1941-5092	en_US
dc.contributor.author	Da Silva Rosa, R	en_US
dc.contributor.author	Duong, L	en_US
dc.contributor.author	Izan, H	en_US
dc.contributor.editor	Faff, R	en_US
dc.date	2010-07-04	en_US
dc.date.issued	2010-01	en_US
dc.identifier.citation	2010 AFAANZ Conference Website, 2010, pp. 1 - 27	en_US
dc.identifier.uri	http://hdl.handle.net/10453/16667
dc.description.abstract	This paper investigates the extent to which Australian CEOs are compensated following the completion of mergers and acquisitions (M&A)with reference to the incentive alignment and managerial power perspective. Findings reveal that CEOs of acquiring ?rms receive signi?- cantly higher compensation in the year of completing M&As and one year after. This higher compensation is presented in all forms: bonus only, salary only, salary and bonus, and total compensation. It is also found that the incentive alignment and managerial power approach are not mutually exclusive and they both can have some degrees of explaining the variation of CEO compensation following mergers. We ?nd a positive correlation between CEO compensation and ?rm performance, and some measures of CEOs e?ort and skill in completing the deal. However, we observe that CEOs of bidding ?rms have signi?cantly lower bonus and total compensation if there is any entrenchment in the CEO governance process (i.e. CEO is also a chair of the board, or a member of the nominating committee). This result is sharply opposite to the US evidence (Gristein and Hribar (2004)) where CEO compensation after mergers is signi?cantly driven by CEO power. Overall our ?ndings are more consistent with the predictions of the incentive alignment theory rather than the managerial power theor	en_US
dc.publisher	AFAANZ	en_US
dc.relation.ispartof	2010 AFAANZ Conference Website	en_US
dc.relation.ispartof	Accounting and Finance Association of Australia and New Zealand Conference	en_US
dc.title	CEO compensation from M&As in Australia	en_US
dc.type	Conference Proceeding
utslib.location	Australia	en_US
utslib.location.activity	Christchurch, New Zealand	en_US
utslib.for	150102 Auditing and Accountability	en_US
dc.location.activity	Christchurch, New Zealand	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.consider-herdc	false	en_US
pubs.place-of-publication	Australia	en_US
pubs.start-date	2010-07-04	en_US

Abstract:

This paper investigates the extent to which Australian CEOs are compensated following the completion of mergers and acquisitions (M&A)with reference to the incentive alignment and managerial power perspective. Findings reveal that CEOs of acquiring ?rms receive signi?- cantly higher compensation in the year of completing M&As and one year after. This higher compensation is presented in all forms: bonus only, salary only, salary and bonus, and total compensation. It is also found that the incentive alignment and managerial power approach are not mutually exclusive and they both can have some degrees of explaining the variation of CEO compensation following mergers. We ?nd a positive correlation between CEO compensation and ?rm performance, and some measures of CEOs e?ort and skill in completing the deal. However, we observe that CEOs of bidding ?rms have signi?cantly lower bonus and total compensation if there is any entrenchment in the CEO governance process (i.e. CEO is also a chair of the board, or a member of the nominating committee). This result is sharply opposite to the US evidence (Gristein and Hribar (2004)) where CEO compensation after mergers is signi?cantly driven by CEO power. Overall our ?ndings are more consistent with the predictions of the incentive alignment theory rather than the managerial power theor

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http://hdl.handle.net/10453/16667