Details

Autor(en) / Beteiligte

• Seo, Jeongil
• Gamache, Daniel L.
• Devers, Cynthia E.
• Carpenter, Mason A.

Titel

The role of CEO relative standing in acquisition behavior and CEO pay

Ist Teil von

• Strategic management journal, 2015-12, Vol.36 (12), p.1877-1894

Ort / Verlag

Chichester, UK: John Wiley & Sons, Ltd

Erscheinungsjahr

2015

Link zum Volltext

Quelle

Wiley Online Library Journals Frontfile Complete

Beschreibungen/Notizen

• In this study, we develop and test a theory of CEO relative pay standing. Specifically, we propose that CEOs with negative relative pay standing status (underpaid relative to comparison CEOs) will engage in acquisition activity, as a self-interested means of attempting to realign their pay with that of their peers. We further propose that, when CEOs with negative relative pay standing acquire, they will tend to finance those acquisitions more heavily with stock than cash, to mitigate the risk associated with those deals. Finally, we argue that acquisition activity will partially mediate the influence of CEO negative relative pay standing on subsequent CEO compensation increases; however, that pay growth will come primarily in the form of long-term incentive pay. Our results support our predictions.