Decision Making in Acquisitions : The Effect of Outside Directors' Compensation on Acquisition Patterns  

Oleh:

Deutsch, Yuval ; Keil, Thomas ; Laamanen, Tomi

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: JOM: Journal of Management vol. 33 no. 1 (Feb. 2007), page 30-56.
Topik: DECISION MAKING; acquisition behaviour; outside directors; stock - based compensation
Fulltext: 30.pdf (207.32KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ92.12 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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This article examines how the compensation paid for outside directors affects firms’ acquisition behavior. Using panel data of Standard & Poor’s 1500 firms between 1996 and 2002, the authors find that stock and stock option pay for outside directors are related in an inverted U - shaped manner to a firm’s acquisition rate and that for stock options, this relationship is moderated by board composition. Their findings suggest a dual agency model of corporate governance, according to which not only executives’ incentives but also outside directors’ incentives should be aligned with the shareholder value creation.

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