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Bank Mergers, the Market for Bank CEOS, and Managerial Incentives
SSRN Electronic Journal
2003
Abstract
After a large bank merger the compensation of the surviving bank's CEO often increases materially. Theories of executive compensation based on managerial productivity and optimal incentives suggest that changes in CEO compensation are related to the potential gains from merger. Alternatively, compensation gains might result from an increase in bank size regardless of whether the merger creates value. We examine mergers among billion-dollar banks in the 1990s and find results consistent with managerial productivity. Specifically, we show empirically that changes in CEO compensation after mergers are positively related to anticipated gains from merger measured at the announcement date. Other changes in the structure of compensation are also consistent with hypotheses based on managerial productivity and incentive restructuring
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Details
- Title
- Bank Mergers, the Market for Bank CEOS, and Managerial Incentives
- Creators
- Christopher W Anderson - University of KansasDavid A Becher - Finance
- Publication Details
- SSRN Electronic Journal
- Publisher
- SSRN
- Resource Type
- Other
- Language
- German
- Academic Unit
- Bennett S. LeBow College of Business; Finance; Drexel University
- Other Identifier
- 991019551547004721