Research About The Impact Of The Executive Compensation On M&A Performance Based On Data From Listed Companies In China

Mergers and acquisitions as a modern enterprise scale expansion are important means of industrial upgrading. However, since the decision of M&A activities are often made by senior management of the enterprise, the executive compensation may have significant influence over the M&A performance. In China, most scholars who study in mergers and acquisitions tend to focus on the company's control background and equity characteristics, ignoring the M&A activities'decision makers-the enterprise senior management, In this article, executive behavior is mainly concerned when study on M&A activities of listed firms, from the perspective of executive compensation. This article intend to prove the interrelationship between CEO's compensation and acquisition effectiveness.Considering that the relationship between management compensation and acquisition activities could be quite complicated, it could not be fully tested through a single regression model. On one hand, M&A activities could improve CEO's compensation because of the increasing size of the acquirer; on the other hand, appropriate compensation structure may incentive CEO to take more M&A activities, even though some of them may be harm to shareholders' interest. In term to solve these problems, this article set up three different models to test the hypothesis we set based on relative studies in this topic. Through all these tests, we proved that, in the event of a merger, executives' compensation has showed a greater sensitivity of ascension, on the other hand, for the performance of the decline is not sensitive. Meanwhile, the article also reveals the executive compensation, especially equity based compensation, has positive effects for short-term M&A performance, but not significantly influence the long-term M&A performance.