A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.
- Topic classification is ongoing.
- Please kindly let me know [mingze.gao@mq.edu.au] in case of any errors.
Your search
Topic
Publication year
Incentive Effects of Stock and Option Holdings of Target and Acquirer CEOs
Resource type
Authors/contributors
- Cai, Jie (Author)
- Vijh, Anand M. (Author)
Title
Incentive Effects of Stock and Option Holdings of Target and Acquirer CEOs
Abstract
Acquisitions enable target chief executive officers (CEOs) to remove liquidity restrictions on stock and option holdings and diminish the illiquidity discount. Acquisitions also enable acquirer CEOs to improve the longāterm value of overvalued holdings. Examining all firms during 1993 to 2001, we show that CEOs with higher holdings (illiquidity discount) are more likely to make acquisitions (get acquired). Further, in 250 completed acquisitions, target CEOs with a higher illiquidity discount accept a lower premium, offer less resistance, and more often leave after acquisition. Similarly, acquirer CEOs with higher holdings pay a higher premium, expedite the process, and make diversifying acquisitions using stock payment.
Publication
The Journal of Finance
Volume
62
Issue
4
Pages
1891-1933
Date
2007
Citation
Cai, J., & Vijh, A. M. (2007). Incentive Effects of Stock and Option Holdings of Target and Acquirer CEOs. The Journal of Finance, 62, 1891–1933.
Journals
Topic
Link to this record