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Compensations of Top Executives and M&A Behaviors: An Empirical Study of Listed Companies

Author

Listed:
  • Jiao Xue

    (School of Design, Shanghai Jiao Tong University, Shanghai 200240, China)

  • Heng Fan

    (Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai 200240, China)

  • Zhanxun Dong

    (School of Design, Shanghai Jiao Tong University, Shanghai 200240, China)

Abstract

This study empirically examines the relationship between executive compensation and mergers and acquisitions (M&A) behaviors by identifying the influence of short- and long-term incentive on the propensity and scale of M&A. When the short-term incentive is insufficient, M&A behaviors serve as a beneficial compensation mechanism. Thus, lack of executives’ incentive promotes the propensity to engage in M&A and significantly affects the scale of M&A. With regard to long-term incentives, M&A behaviors serve as a beneficial creation mechanism. Shareholding of executives promotes M&A propensity, and does not significantly affect the scale of M&A. This study significantly contributes to research in M&A behaviors by revealing the beneficial distribution mechanisms of M&A behaviors.

Suggested Citation

  • Jiao Xue & Heng Fan & Zhanxun Dong, 2020. "Compensations of Top Executives and M&A Behaviors: An Empirical Study of Listed Companies," IJFS, MDPI, vol. 8(4), pages 1-13, October.
    • Handle: RePEc:gam:jijfss:v:8:y:2020:i:4:p:64-:d:433519
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    References listed on IDEAS

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