Compensations of Top Executives and M&A Behaviors: An Empirical Study of Listed Companies

Jiao Xue, Heng Fan and Zhanxun Dong
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Jiao Xue: School of Design, Shanghai Jiao Tong University, Shanghai 200240, China
Heng Fan: Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai 200240, China
Zhanxun Dong: School of Design, Shanghai Jiao Tong University, Shanghai 200240, China

IJFS, 2020, vol. 8, issue 4, 1-13

Abstract: This study empirically examines the relationship between executive compensation and mergers and acquisitions (M&A) behaviors by identifying the influence of short- and long-term incentive on the propensity and scale of M&A. When the short-term incentive is insufficient, M&A behaviors serve as a beneficial compensation mechanism. Thus, lack of executives’ incentive promotes the propensity to engage in M&A and significantly affects the scale of M&A. With regard to long-term incentives, M&A behaviors serve as a beneficial creation mechanism. Shareholding of executives promotes M&A propensity, and does not significantly affect the scale of M&A. This study significantly contributes to research in M&A behaviors by revealing the beneficial distribution mechanisms of M&A behaviors.

Keywords: mergers and acquisitions behaviors; executive compensation incentive; beneficial distribution mechanisms; listed companies (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2020
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