This thesis investigates the monitoring effect from institutional ownership on bidder Chief Executive Officer (hereafter CEO) compensation in mergers and acquisitions (hereafter M&A) as well as the shift in compensation structure. While it is well-established in the literature that bidder CEO compensation soars significantly after conducting such transactions, the sources of the growth are left unclear. One major argument, the traditional theory, proposes that the growth derives from additional wealth created to shareholders in M&A, because according to the nature of compensation contract, CEOs’ interests are effectively aligned with shareholders’ benefits. On the other hand, scholars of managerial power theory argue that managerial power is stronger than shareholders’ oversight, so managers use M&A as a cover to expropriate wealth from shareholders. Whether the traditional theory or the managerial power theory dominates depends on the presence of optimal contract and the effectiveness of corporate governance. Institutional owners have more motivation and resources to restrict managerial behaviour than diffused owners. Thus, the change in CEO compensation following M&A and the driving factors behind the change could be different in firms with different types of ownership. After examining the 268 merger events from 266 US public non-family bidding firms from 2001 to 2005, this study finds that the magnitude of increase in CEO cash-based compensation is significantly alleviated in the presence of large institutional shareholders, and that the increase seems to be positively related to good short-term performance rather than managerial power. However, the concentrated institutional ownership does not seem to affect CEO equity-based compensation or the change in compensation structure. Besides, we do not find any significant relation between firm long-term post-acquisition performance and the market reaction to the announcement of M&A. Thus, we propose that without a reliable indication from short-term performance, large institutional shareholders could have problems in understanding the potential impact of M&A and they might adjust CEO equity-based compensation in a serial process after M&A.

In this study, a strategic thinking and planning model known as Synergy Value Index (SVI) model was developed for estimating the synergy value in MandA. The SVI (QE) from the confirmed SVI model allows quick estimation of synergy between two companies in a merger and acquisition. SVI (QE) is expressed as a percentage, which is a measurement of synergy between two companies in an MandA. This confirmed SVI model evolved from the theoretical model through a process of model building. The study took a holistic approach of understanding synergy value drivers from different schools of thought found in the literatures. A theoretical strategic thinking and planning model was developed and confirmed by expert panelists, from which a conceptual model was created. The conceptual model was tested in two case studies and modified to the preliminary model. The preliminary model was further tested in two case studies to arrive at the confirmed model. During the process of model building, the concepts of synergy value and synergy value drivers become clearer. The study found that 39 synergy value drivers are important in estimating synergy value for MandA. However, only 11 synergy value drivers need be considered for quick computation of Synergy Value Index. In addition, the study offers insight to the study of synergy in MandA. Approaching the study from various different schools of thought was significant because it contributes to a holistic understanding of the behavior of the various synergy value drivers. The study proposed a model identifying synergy value drivers that was confirmed by both expert panelists and case studies. By using the SVI as a unit of measurement of synergy, synergy value drivers of different importance can be measured relative to each other for comparison. The model allowed for a quick evaluation of synergy fit in MandA, especially when the time frame for making a good decision with minimum error during the pre-acquisition phase can be very short. In practice, the SVI model can be used with other financial evaluation tools to provide a strategic perspective of the potential merger and acquisition to the acquirer. Hence, the model can be a very useful platform for the acquirer to think and discuss internally and quantitatively in terms of SVI of the various takeover candidate companies. / Thesis (PhDBusinessandManagement)--University of South Australia, 2005.

In this study, a strategic thinking and planning model known as Synergy Value Index (SVI) model was developed for estimating the synergy value in MandA. The SVI (QE) from the confirmed SVI model allows quick estimation of synergy between two companies in a merger and acquisition. SVI (QE) is expressed as a percentage, which is a measurement of synergy between two companies in an MandA. This confirmed SVI model evolved from the theoretical model through a process of model building. The study took a holistic approach of understanding synergy value drivers from different schools of thought found in the literatures. A theoretical strategic thinking and planning model was developed and confirmed by expert panelists, from which a conceptual model was created. The conceptual model was tested in two case studies and modified to the preliminary model. The preliminary model was further tested in two case studies to arrive at the confirmed model. During the process of model building, the concepts of synergy value and synergy value drivers become clearer. The study found that 39 synergy value drivers are important in estimating synergy value for MandA. However, only 11 synergy value drivers need be considered for quick computation of Synergy Value Index. In addition, the study offers insight to the study of synergy in MandA. Approaching the study from various different schools of thought was significant because it contributes to a holistic understanding of the behavior of the various synergy value drivers. The study proposed a model identifying synergy value drivers that was confirmed by both expert panelists and case studies. By using the SVI as a unit of measurement of synergy, synergy value drivers of different importance can be measured relative to each other for comparison. The model allowed for a quick evaluation of synergy fit in MandA, especially when the time frame for making a good decision with minimum error during the pre-acquisition phase can be very short. In practice, the SVI model can be used with other financial evaluation tools to provide a strategic perspective of the potential merger and acquisition to the acquirer. Hence, the model can be a very useful platform for the acquirer to think and discuss internally and quantitatively in terms of SVI of the various takeover candidate companies. / Thesis (PhDBusinessandManagement)--University of South Australia, 2005.

Target firms in Australian takeovers are required to obtain an independent assessment of the offer price in situations where the Corporations Law considers the bidder has a superior bargaining position. The intention of this requirement is to protect target shareholders from being offered a lower takeover premium. The only empirical study of expert reports, Eddey (1993), is consistent with expert reports achieving their purpose, as the results indicate no difference in target firm premiums in offers with and without an expert report. Eddey also reports that a revision in offer price is more likely where an expert indicates the bid is �not fair and reasonable.� Using all takeovers from 1990 to 2000, this thesis aims to re-examine and substantially extend the findings in Eddey. As the sample includes all bids, irrespective of the form of payment consideration, the thesis will assess whether the results in Eddey can be extrapolated from cash-based bids to all takeover bids. In addition, the analysis will extend Eddey�s results by investigating whether expert reports result in a higher probability of a revision in offer price relative to takeovers without an expert report. This study also investigates the impact of the expert report on bidder announcement abnormal returns and examines the returns to both bidders and targets when the expert report is released. This will add to the limited current knowledge on the impact of expert reports on the capital market. This thesis also tests the validity of public criticisms of expert independence. Firstly, experts have been publicly criticised on the basis that they are not independent from the target firm. It has been suggested that such experts will be more likely to provide an opinion that agrees with the recommendation of target directors. Secondly, it has been alleged that experts who are also the target auditor provide their reports at a lower fee by cross-subsidising the reports� preparation from other fees received from the client. The concern with this practice is that these reports may be of lower quality. This criticism is tested by developing an expert fee model. This fee model is then used to assess whether, similar to evidence in the auditing field, �quality� experts earn a fee premium. The results indicate that the need for an expert report does not affect bidder abnormal returns at either the announcement of the takeover or release of the expert report. On the other hand, target shareholders earn significantly lower abnormal returns at the announcement of a bid where an expert report is required. This result is inconsistent with Eddey (1993) and raises doubt over whether experts prevent bidders from using their superior bargaining position to offer target shareholders a lower premium. Consistent with Eddey, the probability of an alteration in offer price is greater where an adverse expert opinion is given. The results also show that the presence of an expert increases the likelihood of a bid revision relative to takeovers in general. Target abnormal returns on the release of an expert report are positive and significant, irrespective of the type of expert opinion. This result however, is sensitive to any association between the author of the report and the target. In the case that an expert discloses any prior or current business dealings with the target, abnormal returns are insignificant. The conclusion from this finding is that the market perceives expert reports prepared by an associate of the target as lacking credibility. In light of this lack of information content it is recommended corporate regulators review those experts permitted to prepare reports. Contrary to the published criticisms, experts who have business dealings with the target are just as likely as other experts to provide an opinion that agrees with the recommendation of directors. The tests of a fee reduction by experts associated to the target indicate significant lower fees where the expert is the target auditor. Further analysis shows this result is only significant where the auditor is also a non-Big 6/5 firm. These auditors are also found to provide reports that are significantly shorter than other experts, suggesting the cut in fee is achieved by reducing the amount of effort. The results also find that the top two experts, Grant Samuels and Associates and Price Waterhouse Coopers, earn a fee premium over other experts. The finding of a fee premium for a large accounting firm indicates that such firms may receive a premium for both auditing and non-audit services.

Diss. Stockholm : Handelshögsk., 2003.

Zugl.: Bayreuth, Universiẗat, Diss., 2008.

Zugl.: Ulm, Univ., Diss., 2007

Zugl.: Bielefeld, Univ., Diss., 2007

Thesis (Ph.D.)--Drexel University, 2008. / Includes abstract and vita. Includes bibliographical references (leaves 185-189).

Thesis (Ph. D.)--University of Washington, 1998. / Vita. Includes bibliographical references (leaves [84]-89).