Decoupling CEO Wealth and Firm Performance: The Case of Acquiring CEOs

By Jarrad Harford, Kai Li. 2007

579 citations recorded by the source corpus.

Subfields: Accounting, Organizational Behavior and Human Resource Management

View Paper: https://www.semanticscholar.org/paper/3c7d316daef3ed29fd604a6d29a64ecd85966742

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Citations in the corpus

Cash Holdings, Corporate Governance Structure and Firm Valuation (2009, unknown): “The central theme of these studies is that in firms with high cash reserves, entrenched managers have the incentives to spend corporate resources in negative net present value projects that harm shareholders, consistent with the Jensen’s (1986) agency costs of free cash flow.”
CEO pay incentives and risk-taking: Evidence from bank acquisitions (2011, methodology): “We use CEO TENURE as in Harford and Li (2007) and a dummy variable which is equal to 1 if the CEO also acts as chairman of the board (DUALITY) as in Pathan (2009).”
Industry contagion in loan spreads (2012, unknown): “Harford and Li (2007) find that chief executive officers (CEOs) reap personal benefits from making acquisitions even when these acquisitions have poor outcomes for stockholders.”
Deal Size, Acquisition Premia and Shareholder Gains (2013, unknown): “Moreover, managers may overpay for large targets because they generally provide particularly high private benefits (Morck, Shleifer and Vishny, 1990; Loderer and Martin, 1990; Grinstein and Hribar, 2004; Harford and Li, 2007).”
Managerial Risk Taking (2016, unknown): “In particular, some studies have shown that CEOs benefit from an acquisition regardless of the actual performance of the acquisition (Bliss & Rosen, 2001; Harford & Li, 2007) and appear to use acquisitions to increase their compensation (Seo et al., 2014).”
CEO network centrality and merger performance (2015, background): “This will allow them to pursue acquisitions benefitting bidder CEOs (possibly in terms of higher compensation insensitive to value losses – Jensen and Murphy, 1990; Harford and Li, 2007), while the acquisitions may not benefit bidder shareholders and may fail to”
Corporate governance and firm cash holdings in the US (2008, background): “Further, evidence in Bliss and Rosen (2001) and Harford and Li (2007) establishes that CEO compensation and wealth increase after acquisitions, even if those acquisitions destroy value.”
Overpriced Shares, Ill-Advised Acquisitions, and Goodwill Impairment (2011, unknown): “Furthermore, because bidder managers may obtain personal wealth gains from acquisitions, they also choose to pursue acquisitions even though the deals do not necessarily increase shareholder value (Harford and Li 2007).”
Do Analysts Matter for Governance? Evidence from Natural Experiments (2015, background): “A recent paper by Harford and Li (2007) documents that a substantial expected post-merger increase in compensation gives a CEO ex ante incentives to undertake an acquisition, even if the acquisition is value-destroying.”
6 Pay and Performance: Individuals, Groups, and Executives (2009, background): “Harford and Li ( 2007 ) similarly found that mergers typically result in higher CEO compensation, despite poor post‐merger stock price performance.”
Inside Debt and Mergers and Acquisitions (2014, unknown): “Introduction Following the seminal paper by Jensen and Meckling (1976), several studies have investigated the relationship between executive compensation contract design and corporate behavior but mostly focused on salary, bonus, stocks, and stock options as major forms of compensation (e.”
Directors’ and Officers’ Liability Insurance and Acquisition Outcomes (2011, unknown): “Harford and Li (2007) find that chief executive officers (CEOs) reap personal benefits from making acquisitions even when these acquisitions have poor outcomes for stockholders.”