The Impact of Mergers and Acquisitions on Executive Pay in the United Kingdom

Paul Guest ()

Working Papers from Centre for Business Research, University of Cambridge

Abstract: We examine the impact of acquisitions on executive pay in UK acquirers over 1984-2001. For the overall sample, which includes foreign, domestic, public and private targets, there is a significant transitory pay increase. Pay changes are not affected by target nationality or organizational form, although initial cross-border acquisitions do result in higher pay. Pay increases are higher following acquisitions of targets with high pay, but not of targets in high pay countries. CEOs are rewarded equally for bad and good acquisitions, and those well rewarded are more likely to reacquire. However, bad acquisitions do not on average increase CEO wealth because of an offsetting decline in CEO shareholding value. Pay impacts are not affected by the corporate governance characteristics of the acquiring firm.

Keywords: Executive compensation; acquisitions; cross-border; private; corporate governance (search for similar items in EconPapers)
JEL-codes: G34 J33 (search for similar items in EconPapers)
Date: 2007-09
New Economics Papers: this item is included in nep-bec and nep-com
Note: PRO-2
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Related works:
Journal Article: The Impact of Mergers and Acquisitions on Executive Pay in the United Kingdom (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:cbr:cbrwps:wp354

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