Skip navigation

What’s In It For Me? CEOs Whose Firms Are Acquired

Authors: Hartzell, Jay
Ofek, Eli
Yermack, David
Issue Date: May-2001
Series/Report no.: FIN-01-049
Abstract: We study benefits received by target company CEOs in completed mergers and acquisitions. These executives obtain wealth increases with a median of $4 to $5 million and a mean of $8 to $11 million, roughly in line with the permanent income streams that they sacrifice. CEOs receive lower financial gains from those transactions in which they become executives of the buyer, suggesting that tradeoffs exist between the financial and career-related benefits they extract. We find very high rates of turnover both at the time of the merger and, for those executives who stay, for several years post-merger. Regression estimates suggest that target shareholders receive lower acquisition premia in transactions that involve extraordinary personal treatment of the CEO.
Appears in Collections:Economics Working Papers

Files in This Item:
File Description SizeFormat 
FIN-01-049.pdf171 kBAdobe PDFView/Open

Items in FDA are protected by copyright, with all rights reserved, unless otherwise indicated.