Matching Items (4)

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What Drives Mergers and Acquisitions? The Effects of Compensation Structure and Managerial Hubris on Executive Decision-Making

Description

This thesis seeks to explore the contrast between the performance of mergers and acquisitions and the propensity of CEOs to enter into these deals. M&A are common means by which

This thesis seeks to explore the contrast between the performance of mergers and acquisitions and the propensity of CEOs to enter into these deals. M&A are common means by which firms achieve inorganic growth, but they often perform poorly and fail to accrue expected returns. This apparent contrast between deal popularity and performance prompts further examination and an application of theoretical concepts from the field of strategic management. Following a review of M&A theory, this thesis explores agency theory and managerial hubris and applies these concepts to executive decision-making in M&A. Four hypotheses are presented, evaluating the effects of compensation structure and overconfidence on the M&A decision-making behavior of executives.

Contributors

Agent

Created

Date Created
  • 2013-05

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AGENCY THEORY VS. INFORMATION MEASUREMENT THEORY: A CASE STUDY ON THE EFFECTIVENESS OF INCENTIVES IN THE WORKPLACE

Description

This study analyzes the impact of incentive programs on performance. Agency theory and Information Measurement theory are used to hypothesize about the impact of incentives upon performance. Empirical evidence from

This study analyzes the impact of incentive programs on performance. Agency theory and Information Measurement theory are used to hypothesize about the impact of incentives upon performance. Empirical evidence from the case study shows that incentives are ineffective at increasing performance, but the statistical significance of the data is too low to generalize the findings beyond that of short term cold call sales. Several avenues for continued research are suggested.

Contributors

Agent

Created

Date Created
  • 2013-05

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Give it to me straight: how, when, and why managers disclose inside information about seasoned equity offerings

Description

Managers’ control over the timing and content of information disclosure represents a significant strategic tool which they can use at their discretion. However, extant theoretical perspectives offer incongruent arguments and

Managers’ control over the timing and content of information disclosure represents a significant strategic tool which they can use at their discretion. However, extant theoretical perspectives offer incongruent arguments and incompatible predictions about when and why managers would release inside information about their firms. More specifically, agency theory and theories within competitive dynamics provide competing hypotheses about when and why managers would disclose inside information about their firms. In this study, I highlight how voluntary disclosure theory may help to coalesce these two theoretical perspectives. Voluntary disclosure theory predicts that managers will release inside information when managers perceive that the benefits outweigh the costs of doing so. Accordingly, I posit that competitive dynamics introduce the costs associated with disclosing information (i.e., proprietary costs) and that agency theory highlights the benefits associated with disclosing information. Examining the context of seasoned equity offerings (SEOs), I identify three ways managers can use information in SEO prospectuses. I hypothesize that competitive intensity increases proprietary costs that will reduce disclosure of inside information but will increase discussing the organization positively. I then hypothesize that capital market participants (e.g., security analysts and investors) may prefer managers to provide more, clearer, and positive information about the SEO and their firms. I find support for many of my hypotheses.

Contributors

Agent

Created

Date Created
  • 2017

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Flying High: The Effect of Organizational Status on CEO Perquisites

Description

This dissertation explores the determinants of Chief Executive Officer (CEO) perquisites, i.e., nonmonetary compensation offered to particular employees and not essential to the accomplishment of a CEO’s duties. While the

This dissertation explores the determinants of Chief Executive Officer (CEO) perquisites, i.e., nonmonetary compensation offered to particular employees and not essential to the accomplishment of a CEO’s duties. While the current CEO perquisite literature has focused on understanding the economic determinants of CEO perquisites, I study the social-psychological determinants of perquisites. Specifically, I propose that organizational status is positively associated with CEO perquisites. The status literature suggests that high-status organizations derive benefits from status and status signals, while agency theory proposes that perquisites are a way for CEOs to extract private rents. Therefore, I posit that for high-status organizations, the benefits derived from certain CEO perquisites may negate the costs associated with those perquisites. I examine a specific CEO perquisite: the mandatory use of corporate aircraft for personal travel. Prior research and the popular press suggest that this perquisite is often seen not only as a status signal but also as an agency cost. Accordingly, I hypothesize that higher status organizations and organizations with higher status directors are more likely than lower status organizations or organizations with lower status directors to mandate their CEOs to use corporate aircraft for personal travel. I also propose that the effect is stronger for low- or high-status organizations than for middle-status organizations. In addition, I hypothesize five contingencies moderating the above relationships. I examine hypothesized relationships using a sample of S&P 500 organizations, and I find support for many of my hypotheses. This dissertation contributes to both status and executive compensation literature.

Contributors

Agent

Created

Date Created
  • 2019