An Examination of Pre-Merger Executive Compensation Structure in Merging Firms *

摘要: In recent years, growth through acquisition has been an important strategy for many firms. While considerable attention devoted to merger valuation analysis, less consideration paid successful integration of merging firms (Carey, 2000; Anonymous, 1999). Differences in culture, corporate philosophy, management style, structure, and compensation are just a few the subjects be reconciled. Much media given difficult issues combining structuring executive packages (Schellhardt, DeVoge Shiraki (2000) suggest that involving employees often most poorly handled mergers acquisitions, this poor handling can create problems may undermine success merger. Yet, at level, due uncertainties about job responsibilities, power sharing, compensation. This study focuses on one these issues, namely issues. Recent activity motivated discussion pay. some cases, significant differences pre-merger structure magnitude have raised interesting questions firm compatibility. One example is between Citicorp Travelers Insurance. John S. Reed, CEO Citicorp, Sanford I. Weill, Travelers, agreed act as Co-Chairmen Co-Chief Executive Officers new firm, Citigroup. Prior merger, Weill had substantially higher than Reed. Media reports doubts Reed could successfully integrate two predicted turf battles future (Dwyer, 1998). Anecdotal evidence suggests retention arise during acquisitions. our sample, 1,612 executives listed proxy statement top-five acquiring firms, only 1,112 appear after Furthermore, target-firm seldom list (1) Assuming desire retain top from both least short term facilitate post-merger integration, large total challenges process. These particularly when outside firms' c ore competencies there critical need their expertise. fact, Walsh (1988) attractive management. Acquiring target exhibit either levels or mix, including salary performance-based components such bonuses, restricted stock, long-term incentive plans, stock options. The disparities troublesome if they impede Closing pay gaps begin chip away merger's proposed savings. Alternatively, allowing continue result morale among members lower-paid team. Equity theory (Adams, 1963, 1965) individuals perceive inequities relationships with others exist, feel distress use various techniques reduce distress, but not limited to, altering terminating relationship. research increased dramatically (2) examining relation limited. Two studies examine whether associated financial performance. find mixed results. Schmidt Fowler (1990) does relate …