Olgun Sahin paper appears in international journal
Olgun Sahin, School of Business, and co-authors Nont Dhiensiri and Pattarake Sarajoti, had the article “Equity-based compensation and performance of acquisitions” published in the International Journal of Monetary Economics and Finance (IJMEF), Vol. 4, No. 3, 2011.
Abstract: We investigate how the equity-based compensation (EBC) of top executives affects the performance of acquisitions. In contrast to the results of Datta et al. (2001), we find that high EBC acquirers pay higher premiums for targets than that of low EBC acquirers. The cumulative abnormal return around the acquisition announcement is lower for acquiring firms with high EBC. However, we find that the long-run performance of acquiring firms is positively correlated with EBC. Our results suggest that high EBC acquirers experience lower sensitivity to size and momentum factors that unexpectedly lowers the cost of equity, leading to higher returns.