Merger Bonuses Important to Protecting Shareholder Wealth of Acquired Companies
May 24, 2017
Research consistently shows that when target CEOs receive extra benefits during mergers, takeover premiums are lower. According to Eliezer Fich, PhD, professor of finance in Drexel University’s LeBow College of Business, this is often interpreted as a conflict of interest: target CEOs sacrifice premiums for personal gain, facilitating a wealth transfer from target to acquirer shareholders.
