Does threat of dismissal constrain acquisition premium in CEO pay

Homroy, Swarnodeep (2015) Does threat of dismissal constrain acquisition premium in CEO pay. Economica, 82 (Suppl.). pp. 1349-1371. ISSN 0013-0427

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This paper shows that the likelihood of post-acquisition CEO turnover can act as a constraint on risky acquisition decisions. The acquisition premium in pay decreases by over 50% if the dismissal risk is controlled for. Given a smaller pay premium for undertaking acquisitions and a non-zero risk of dismissal, shareholders are shown to be able to exercise some control over managerial incentives to engage in risky acquisitions through the mechanism for dismissal.

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Journal Article
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This is the peer reviewed version of the following article: Homroy, S. (2015), Does Threat of Dismissal Constrain Acquisition Premium in CEO Pay?. Economica. doi: 10.1111/ecca.12163 which has been published in final form at This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.
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?? economics and econometrics ??
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22 Jun 2015 10:32
Last Modified:
18 Dec 2023 01:29