Homroy, Swarnodeep (2012) Impact of Acquisitions on CEO pay. In: BAM, 2012-09-112012-09-13, Cardiff. (Submitted)
I examine the impact of acquisition on the pay of CEOs of S&P 1500 firms from 1994-2010. I find insignificant effect of firm performance on post-acquisition CEO pay. Controlling for firm size, CEOs are paid a premium in post-acquisition pay. I find no evidence of differential pay increase for domestic and international acquisitions. Post-acquisition increase in CEO pay is not contingent on the wealth effects and CEOs are not penalized for 'wealth-reducing' acquisitions. I find evidence that a part of acquisition premium in CEO pay can be attributed to the strength of governance. Controlling for survivor bias, the effect of acquisition on CEO pay is downward adjusted.
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