Skip navigation
Please use this identifier to cite or link to this item: http://arks.princeton.edu/ark:/88435/dsp01vt150m70d
Title: Golden Parachutes, Takeovers and Shareholder Wealth
Authors: Radu, Florin
Advisors: Sannikov, Yuliy
Department: Economics
Class Year: 2016
Abstract: financial economists and the general public. Despite this interest, results have been inconclusive and most studies use an outdated data set. I extend past work on the topic by using a more recent sample of 308 mergers and acquisitions from 2008-2014. Through a series of Tobit, Logit and OLS regressions, I find that while GP contracts increase the likelihood of a deal being successful, they do not affect the takeover premium that is paid on the target firm’s common stock. Furthermore, I find that GP incidence and importance are inversely related to the percentage of common stock that is owned by the CEO. These results provide strong support for the Incentive Alignment Hypothesis and suggest that GPs have a positive effect on shareholder wealth, as they increase the probability of a deal being successful and better align the interests of managers and shareholders.
Extent: 81 pages
URI: http://arks.princeton.edu/ark:/88435/dsp01vt150m70d
Type of Material: Princeton University Senior Theses
Language: en_US
Appears in Collections:Economics, 1927-2016

Files in This Item:
File SizeFormat 
Economics_Senior_Thesis_Submission_Click_Here_To_Submit_fradu_attempt_2016-04-13-10-49-34_radu_florin.pdf684.68 kBAdobe PDF    Request a copy


Items in Dataspace are protected by copyright, with all rights reserved, unless otherwise indicated.