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What’s In It For Me? Personal Benefits Obtained by CEOs Whose Firms Are Acquired

Authors: Hartzell, Jay
Ofek, Eli
Yermack, David
Issue Date: Jul-2000
Series/Report no.: FIN-00-013
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. Regression estimates suggest that target shareholders receive lower acquisition premia in transactions that involve extraordinary personal treatment of the CEO.
Appears in Collections:Finance Working Papers

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