Incentive Effects of Stock and Option Holdings of Target and Acquirer CEOs  

Oleh:

Jie Cai ; Vijh, Anand M.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 62 no. 4 (Aug. 2007), page 1891-1934.
Topik: INCENTIVE; studies; acquisitions & mergers; chief executive officers; liquidity; stock; incentives
Fulltext: p 1891.pdf (188.97KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Acquisitions enable target executive officers (CEOs) to remove liquidity restrictions on stock and option holdings and dimish the illiquidity discount. Acquisitions also enable acquirer CEOs to improve the long - term value of overvalued holdings. Examining all firms during 1993 to 2001, we show that CEOs with higher holdings (illiquidity discount) are more likely to make acquisitions (get acquired). Furhter, in 250 completed acquisitions, target CEOs with a higher illiquidity discount accept a lower premium, offer less resistance, and more often leave after acquisiton. Similarly, acquirer CEOs with highe rholdings pay a higher premium, expedite the process and make diversifying acquisitions using stock payment.

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