CEO股票期权激励与并购决策关系研究——代理成本的中介作用和CEO过度自信的调节作用

运用美国上市银行1998—2014年的数据,将股票期权激励、代理成本、CEO过度自信与并购决策纳入统一的框架进行研究,以代理成本为中介变量,CEO过度自信为调节变量,以检验股票期权激励是否会影响并购决策,以及股票期权激励、代理成本、CEO过度自信与并购决策之间的关系。实证结果表明:CEO股票期权激励能够有效刺激其做出并购决策;代理成本对股票期权激励与并购决策的关系存在部分中介效应;CEO过度自信能显著调节股票期权激励与并购决策的关系;CEO过度自信对于股票期权激励与并购决策的关系的调节作用会通过代理成本起作用。     

Bank systemic risk and CEO overconfidence

This study examines the relationship between CEO overconfidence and banking systemic risk. We employ the CoVaR (Conditional Value-at-Risk) approach to measure a bank's contribution to systemic risk and compute its MES (Marginal Expected Shortfall) and SRISK (Systemic Risk index) to measure the exposure to banking systemic risk. We use a stock options based measure for CEO overconfidence and explore how managerial overconfidence could be associated with banking systemic risk. Using data for U.S. banks from 1995–2014, we find evidence that banks with overconfident CEOs have a higher contribution and exposure to systemic risk than banks with non-overconfident CEOs. We also show that the impact of CEO overconfidence contributed significantly more to systemic risk during the financial crisis of 2008–2009.     

CEO overconfidence and labor investment efficiency

We examine the impact of CEO overconfidence on labor investment efficiency (LIE). The findings suggest that firms with overconfident CEOs are more likely to have lower LIE. The findings are robust to alternative measures of CEO overconfidence and LIE and after accounting for endogeneity and CEO experience, age, managerial ability, high tech industry, and economic recession. Further analysis shows that: i) our findings are not due to the relation between net hiring and contemporaneous non-labor investments and the difference between high- and low-skilled labor, ii) firms with more analyst following, financially constrained firms, and firms located in states with wrongful discharge laws force CEOs to invest more efficiently in labor. In contrast, firms with dominant CEOs or facing high economic policy uncertainty are less efficient in labor investments, iii) firms with overconfident CEOs exhibit higher labor cost stickiness than those of non-overconfident CEOs, and iv) a lower LIE caused by CEO overconfidence has negative impacts on a firm's future profitability.     

The Value of CEO Mobility: Contextual Factors That Shape the Impact of Prior CEO Experience on Market Performance and CEO Compensation

This study examines the value that prior CEO experience has for the companies that hire such CEOs—as reflected in the firms’ subsequent market‐based performance—as well as its value for the CEO that possesses this experience—as reflected in his or her initial compensation. While we suggest that shareholders tend not to benefit from firms hiring experienced CEOs, we also argue that particular firm and industry contextual factors that shaped the prior CEO experience help ameliorate this detrimental effect. Regardless, we also suggest that prior CEO experience generally stands to benefit the CEOs, in that it brings them a compensation premium over those CEOs without such prior experience. We tested our hypotheses on a sample of 654 US CEO succession events that occurred between 2001 and 2004 and found broad support for our hypotheses. We close with a discussion of the implications of our findings for future research as well as what they mean for firms hiring experienced CEOs and for CEO careers more generally. © 2015 Wiley Periodicals, Inc.     

The effect of CEO incentives on deviations from institutional norms in foreign market expansion decisions: Behavioral agency and cross-border acquisitions

CEO incentives have been the subject of great interest for human resource scholars. We explore the institutional context within which the CEO makes sense of their incentives. Our theory suggests that CEO equity incentives interact with institutional norms to influence foreign market entry choices. Specifically, we argue that CEOs will weigh the risk bearing created by equity incentives, along with the consequences of legitimacy loss, when deciding whether to deviate from institutional norms when internationalizing. In doing so, we advance human resource literature by demonstrating that CEO responses to incentives are influenced by institutional norms and that CEOs' decisions to deviate from institutional norms are shaped by their incentives. We find support for our framework in the analysis of the stake taken by acquirers in 4,184 cross-border acquisitions.     

Fusionen und Übernahmen im Licht der Hybris – Überblick über den Forschungsstand

Although corporate acquisitions are ubiquitous a large number of M&A fails. One explanation for such failure is the hubris hypothesis for corporate takeovers. A decision maker affected with hubris (or overconfidence) will overestimate his abilities in raising potential synergies and is likely to make investment decisions destroying shareholder wealth. The growing literature on CEO hubris proposes various ways to measure hubris. We present these indicators and discuss possible advantages and drawbacks. (71 words)     

CEO optimism,CEO selection,compensation, and corporate investment decision: The case of CEOs who were rehired as CEOs by another firms after turnover

What happens to CEOs after they are let go by their firm? This study is designed to investigate CEOs who are rehired as CEOs by another firms after turnover. CEOs defined as “moderately optimistic” and those who left voluntarily from their departing firms, are younger, have better prior performance, and work in larger firms are found to have a greater likelihood of being rehired as a CEO by another employer. Moreover, new-hire firms with higher growth opportunity and higher R&D expenditures are found to be significantly more willing to hire overconfident CEOs. Furthermore, more-optimistic CEOs are found to receive higher total compensation from their new-hire firms than CEOs who are less optimistic. Finally, overconfident CEOs working in firms with high growth opportunity and higher R&D show a significantly greater tendency toward increasing firm investment.     

CEO Overconfidence and Overinvestment Under Product Market Competition

How does product market competition influence whether CEOs with greater or lower levels of overconfidence are hired and whether CEOs overinvest in innovation? In a Cournot model in which firms hire a CEO to take charge of research and development (R&D) investment and production decisions, this paper shows that CEO overconfidence and overinvestment can be explained as an equilibrium outcome. More importantly, the intensity of product market competition and the equilibrium CEO overconfidence level (and R&D investment) exhibit an inverted U‐shaped relationship. As the product market tends toward perfect competition, all firms hire a realistic CEO and do not overinvest. Copyright © 2014 John Wiley & Sons, Ltd.     

Ethnicity and homophily effects in US M&As

We show that ethnic diversity of CEOs of merging firms has been increasing and report evidence of ethnic homophily effect in M&As transactions. Specifically, M&As perform better when the CEOs of the merging firms share a common ethnic background. In a sample of 444 US mergers completed between 2000 and 2018, we find that ethnic homophily improves the probability of deal completion. Furthermore, we report mild variation of performance across ethnic groups. White CEOs exhibit better postmerger performance while Asian CEOs instigate a better market reaction (announcement return). Subsequent analyses show that White CEOs tend to have longer tenure and longer experience while Asian CEOs tend to be more transparent. We discuss our findings in light of a few extant theories and show that our findings are robust to several additional tests including instrumental variables, Heckman's selection bias correction, and several variations in the model specifications and definitions of key variables.     

Managerial incentives and R&D investments: The moderating effect of the directors’ and officers’ liability insurance

Literature regarding the impact of managerial incentives on firm’s research and development (R&D) investments suggests that due to the riskiness of R&D activities, firms need to provide managerial incentives to encourage managerial discretion on corporate long-term investments of R&D. In spite that managerial incentives influence corporate R&D spending, some also argue corporate R&D spending a function of managerial incentive schemes. This paper applies the simultaneous equation to investigate the association between managerial discretion on R&D investments and the incentive scheme of CEO compensations by using the sample firms listed in Taiwan Security Exchange and Taipei Exchange. The results indicate that the listed firms in Taiwan simultaneously determine corporate R&D investments and CEO compensations. They reward their CEOs in compliance with their efforts on R&D investments and CEO compensation motivates CEOs to align their interests with firms’ long-term investments on R&D. A further analysis of the protection effect from the directors’ and officers’ (D&O) liability insurance suggests that D&O protection intensifies the relationship between R&D investments and CEO compensation. It encourages CEOs to allocate resources on R&D activities and make CEO incentive contracts efficacious on corporate long-term investments. The result is robust in the electronic industry of Taiwan.     

Impact of CEO narcissism and hubris on corporate sustainability and firm performance

To explore the personality traits and corporate strategy of chief executive officers (CEOs), this study investigates how narcissistic and hubristic tendencies in CEOs affect the relationship between corporate sustainability practices (CSP) and firm performance. The primary purpose is to examine whether CEO narcissism and hubris can moderate the effect of corporate sustainability on firm performance. We investigate the influence of corporate sustainability on firm performance in three dimensions: economic, environmental, and social. The relationship between the mechanisms of supervision and agency theory is explored to assist investors in decision making. The results of this study show that compared to narcissistic CEOs, hubristic CEOs will further enhance the positive influence of CSP on corporate performance, especially in the environmental and social dimensions. This research strengthens the literature on CEO narcissism and hubris by demonstrating that CEO personality traits influence the relationship between corporate sustainability practices and firm performance.     

CEO succession with gender change in troubled companies: The effect of a new woman CEO on firm risk and firm risk perceived

The replacement of the CEO is one of the first actions a troubled company may take to recover from a critical situation. In this paper, we analyze the change in firm risk and firm risk perception when women are replacing men as CEOs of troubled companies. The analyses are based on a comprehensive dataset covering all registered companies in Norway from 2005 to 2014. We argue that a new woman CEOs increase the chances of improving the risk situation of troubled companies. Building on CEO succession and social identity theories, we study the firm risk situation under the lenses of risk perception and firm risk, and we find that a newly appointed woman CEO, following a man, tend to decrease the level of risk of the company. Furthermore, we find counterbalancing effects on these changes given the moderation effect of women on the board.     

The effects of formal and informal CEO power on debt policy persistence

We explore the general trends of debt policy persistence and how formal and informal CEO power may influence the persistence based on four dimensions of debt policy. Using a sample of Chinese listed firms during 2008–2018, we clearly identify, for the first time, that the general trends of debt policy persistence include an initial downward trend phase (of 4–5 years) and a subsequent stable trend phase. We divide CEO power into formal and informal CEO power and find that CEOs’ formal power can help to increase debt policy persistence, while the role of informal power is the opposite, providing evidence that CEO power has a double-edged effect on debt policy persistence. Further, our results show that the most important dimensions through which formal and informal CEO power have their respective effects are ownership power and financial expert power. Lastly, it is CEOs’ formal power rather than their informal power that plays a dominant role in promoting the persistence of debt policy.     

The Roles of Chinese CEOs in Managing Individualistic Cultures in Cross-border Mergers and Acquisitions

The individualism-collectivism culture represents an important and well-researched distinction across cultures. Yet research is less clear about how the different levels of individualistic cultures in host countries affect the success of an increasingly important firm strategy – cross-border mergers and acquisitions (CBMAs). This study addresses this key research question in the context of Chinese firms’ CBMAs, as Chinese firms are increasingly acquiring targets outside of China in the New Normal global business landscape. This study further theorizes and tests how the Chinese acquirer CEOs’ characteristics moderate the wealth creation relationship. In an analysis of 404 Chinese firms’ CBMAs, we found that an individualistic culture in the host country is negatively associated with Chinese acquirers’ CBMA wealth creation. We also demonstrate that Chinese CEOs’ exposure to foreign culture and female gender weaken that negative relationship, while CEO duality strengthens this negative relationship. Our research thus suggests that culture in host countries can negatively affect acquirers’ CBMA performance, but CEOs may be able to manage the effects of the culture to increase their CBMA performance.     

How CEO narcissism affects earnings management behaviors

This study examined whether chief executive officers’ (CEOs) with narcissistic tendencies are more likely to execute earnings management behavior because of pressure to fulfill earnings thresholds. The results revealed that a CEO who exhibits high narcissism is more likely to be involved in earnings management to compensate for her/his performance. Our findings suggest that CEO narcissism directly influences financial decisions. Considering the earnings thresholds, firms with a more narcissistic CEO experience a regulatory effect on real earnings management behavior. Studies have indicated that CEOs manipulate earnings to satisfy three primary earnings thresholds: prior year’s reported earnings, zero earnings, and analysts’ forecasts. Our empirical results provide further evidence that CEOs engage in earnings management to fulfill positive earnings thresholds and analysts’ forecasts. We infer that CEOs use the abnormal production cost method as an underlying mechanism to increase reported earnings. Our findings help clarify the relationship between CEO personality traits and earnings manipulation to assist investors with decision-making.     

Experience Matters? The Impact of Prior CEO Experience on Firm Performance

We sample CEOs of the 2005 S&P 500 corporations to look at the relationship between experience in the CEO position of a different firm and the post‐succession financial performance of the firm that they currently lead. We find that experience in the CEO position is negatively related to firm performance. CEOs who directly move to their current CEO position from the previous one and those with job‐specific experience in the same or related industry or at the helm of a previous company similar in size to the current one are associated with significantly lower post‐succession performance than those without prior CEO experience. The results contribute to the literatures on CEO succession, the performance effect of job‐specific experience, and the transferability of human capital. © 2014 Wiley Periodicals, Inc.     

Is Red or Blue More Likely to Narrow the Gap? The Effect of CEO Political Ideology on CEO-Employee Pay Disparity

How does CEO political ideology influence the pay disparity between a CEO and typical firm employees? Drawing on the upper echelons theory, we postulate that politically liberal CEOs are more inclined to address within-firm vertical pay disparity versus conservative or neutral CEOs, because liberals attend more closely to potential inequality issues and are more open to social changes. We furthermore contend that the effect of CEO political ideology varies across certain contextual factors. Results based on a sample of United States public firms support our arguments. Our study contributes to the literature on income inequality by highlighting CEO political ideology as a crucial determinant and investigating the boundary conditions.     

Board Effectiveness and CEO Pay: Board Information Processing Capacity,Monitoring Complexity,and CEO Pay‐for‐Performance Sensitivity

We have developed an information processing theory of board effectiveness to examine board‐chief executive officers (CEOs) pay relations. We theorize that CEO pay reflects the information processing context of boards. Boards have limited information processing capacity and therefore prefer to use outcome‐based CEO pay when they have difficulty in processing information for monitoring their CEOs. Using a longitudinal sample of Standard and Poor's (S&P's) large‐, medium‐, and small‐cap manufacturing firms in the United States from 1998 through 2005, we found support for our theory. Large boards and boards in less complex monitoring contexts tend to link CEO pay less tightly to firm performance by providing less stock‐based incentives, and the tendency of large boards to decrease outcome‐based CEO pay is even greater when boards are not busy or when boards are in less complex monitoring contexts. © 2015 Wiley Periodicals, Inc.     

Innovating Beyond the Horizon: CEO Career Horizon,Top Management Composition,and R&D Intensity

Decreasing research and development (R&D) can impair the ability of firms to remain innovative in the long run. CEOs have been accused of curtailing R&D investments as they approach expected retirement, yet received findings on R&D investment behaviors of late‐career CEOs are mixed. We argue that one reason for these inconsistent findings could be that traditional approaches overlook the fact that CEOs are not isolated agents in making R&D decisions. We build on the premise that CEOs interact with their top management team (TMT) when shaping R&D strategy and advance a contextualized view of CEO dispositions in their late career stages as being constrained or enabled by their TMT. We hypothesize that some TMT attributes (e.g., tenure and age) may amplify, whereas others (e.g., functional experience and education) may mitigate inclinations to reduce R&D. Our findings, based on a longitudinal sample of 100 US manufacturing firms from 1998 to 2008, provide nuanced insights into how different TMT characteristics influence CEO‐TMT dynamics, with TMT age and TMT tenure playing particularly pronounced roles. We discuss implications of our CEO‐TMT interface approach for theory and practice. © 2015 Wiley Periodicals, Inc.     

Human Capital and CEO Compensation during Institutional Transitions

Firms appoint CEOs with different types of human capital in order to manage resource dependencies. How CEOs are compensated thus can be conceptualized as a valuation process of how boards view the value of CEOs' human capital. Two types of human capital – international experience and political ties – have emerged as potential drivers of CEO compensation during institutional transitions. But how they impact CEO compensation has remained unclear. We develop a resource dependence‐based, contingency framework to focus on the external and internal factors that enable or constrain human capital to impact CEO compensation. Because of the tremendous regional diversity within China, externally, we focus on the level of marketization of the region in which firms are headquartered. Internally, we pay attention to two corporate governance mechanisms: politically connected outside directors and compensation committee. Data from 10,329 firm‐year observations at 94 per cent of listed firms in China largely support our framework. Overall, our study contributes to resource dependence research by extending this research to the context of institutional transitions with a focus on how human capital impacts CEO compensation.