CEO Pay Disparity, Takeover Premiums and Bidder Performance in Australia: Efficient Contracting or Managerial Power
We compare acquiring firms’ CEO pay with that of the highest-paid non-CEO director and investigate the influence of CEO pay disparity on takeover premiums and bidder performance. Based on a takeover sample of Australian listed targets and bidders during the 2002–2015 period, we find that takeover pr...
| Main Authors: | , , |
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| Format: | Journal Article |
| Language: | English |
| Published: |
WILEY
2021
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| Subjects: | |
| Online Access: | http://hdl.handle.net/20.500.11937/85093 |
| _version_ | 1848764714845208576 |
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| author | Luong, Hoa Duong, Lien Evans, John |
| author_facet | Luong, Hoa Duong, Lien Evans, John |
| author_sort | Luong, Hoa |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | We compare acquiring firms’ CEO pay with that of the highest-paid non-CEO director and investigate the influence of CEO pay disparity on takeover premiums and bidder performance. Based on a takeover sample of Australian listed targets and bidders during the 2002–2015 period, we find that takeover premiums are significantly higher if the deals are processed by acquiring firms with higher CEO pay disparity. Although these firms do not receive favourable immediate market responses to their takeover announcements, they outperform in the long run. We find no evidence that offering a large takeover premium harms shareholders’ wealth. Overall, our findings largely support efficient contracting theory in the Australian M&A context. |
| first_indexed | 2025-11-14T11:23:45Z |
| format | Journal Article |
| id | curtin-20.500.11937-85093 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T11:23:45Z |
| publishDate | 2021 |
| publisher | WILEY |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-850932023-04-14T03:13:46Z CEO Pay Disparity, Takeover Premiums and Bidder Performance in Australia: Efficient Contracting or Managerial Power Luong, Hoa Duong, Lien Evans, John Social Sciences Business, Finance Business & Economics CEO pay disparity Takeover premium Bidder performance Efficient contracting Managerial power We compare acquiring firms’ CEO pay with that of the highest-paid non-CEO director and investigate the influence of CEO pay disparity on takeover premiums and bidder performance. Based on a takeover sample of Australian listed targets and bidders during the 2002–2015 period, we find that takeover premiums are significantly higher if the deals are processed by acquiring firms with higher CEO pay disparity. Although these firms do not receive favourable immediate market responses to their takeover announcements, they outperform in the long run. We find no evidence that offering a large takeover premium harms shareholders’ wealth. Overall, our findings largely support efficient contracting theory in the Australian M&A context. 2021 Journal Article http://hdl.handle.net/20.500.11937/85093 10.1111/acfi.12784 English WILEY fulltext |
| spellingShingle | Social Sciences Business, Finance Business & Economics CEO pay disparity Takeover premium Bidder performance Efficient contracting Managerial power Luong, Hoa Duong, Lien Evans, John CEO Pay Disparity, Takeover Premiums and Bidder Performance in Australia: Efficient Contracting or Managerial Power |
| title | CEO Pay Disparity, Takeover Premiums and Bidder Performance in Australia: Efficient Contracting or Managerial Power |
| title_full | CEO Pay Disparity, Takeover Premiums and Bidder Performance in Australia: Efficient Contracting or Managerial Power |
| title_fullStr | CEO Pay Disparity, Takeover Premiums and Bidder Performance in Australia: Efficient Contracting or Managerial Power |
| title_full_unstemmed | CEO Pay Disparity, Takeover Premiums and Bidder Performance in Australia: Efficient Contracting or Managerial Power |
| title_short | CEO Pay Disparity, Takeover Premiums and Bidder Performance in Australia: Efficient Contracting or Managerial Power |
| title_sort | ceo pay disparity, takeover premiums and bidder performance in australia: efficient contracting or managerial power |
| topic | Social Sciences Business, Finance Business & Economics CEO pay disparity Takeover premium Bidder performance Efficient contracting Managerial power |
| url | http://hdl.handle.net/20.500.11937/85093 |