Serial takeovers, large shareholders, and CEOs’ equity-based compensation

E.S. Pikulina, L.D.R. Renneboog

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

1 Citation (Scopus)


In this chapter we investigate how the structure of a CEO’s compensation package – and especially his bonus and equity-based compensation (EBC) – influences his M & A decisions. We find that a CEO with a higher proportion of EBC is more likely to initiate (serial) acquisitions. Likewise, a CEO who receives a larger bonus is more eager to be involved in takeovers. We argue that equity-based compensation along with strong performance requirements (stock options and restricted stock become vested only if specific performance criteria are met) induce managers to adopt aggressive growth strategies through M & As. Large outside shareholders reduce a firm’s takeover activity, which is also the case when a CEO holds a significant equity stake.
Original languageEnglish
Title of host publicationThe Research Handbook on Shareholder Power
EditorsJ. Hill, R. Thomas
Place of PublicationCheltenham
PublisherEdward Elgar Publishing Ltd.
ISBN (Electronic)9781782546856
ISBN (Print)9781782546849
Publication statusPublished - 31 Jul 2015

Publication series

NameResearch Handbooks in Corporate Law and Governance Series


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