Research On The Relationship Between The Performance Of M&A And The Compensation Of Top Managers Based On Multiple Elements

As we known,merges and acquisition are critical strategic decisions which are direct and effective ways for corporation' development.However according to the actual merge and acquisition's performance in the market,M&A can make companies realize capital expansion,adjust asset structure,and optimize allocation of resource,meanwhile it will have firms undertaken some risk.The appearance of M&A market is flourishing,however in depth of the market there are much abnormal results of capital allocation including inefficient,invalid even negative effect's M&A decision.And the top managers are as the main strategic executors.Their behaviors will have an effect on the performance of M&A directly.Based on the analysis mentioned above,this paper try to analysis the relationship between compensation and M&A performance,which has a significant impact on guiding corporations how to make efficient incentive compensation plan and select optimal compensation policy for companies development.Research methods in this paper include empirical analysis which selecting M&A deals occurring in US public market from 2010 to 2016 and being over one billion dollars as samples.Second is principal component analysis and regression analysis.The main research contents of empirical analysis include three parts.In the first part,it analysis the corporations' performance change because of M&A.After the analysis,we find that performance go up before M&A,and go down during M&A period,at last it will recovery again after M&A.In the second part,it analysed the effect of top managers' power and skill on compensation.It found that top managers' power and skill both had a positive effect on the compensation,further more,based on the ANOVA,it got a conclusion that is managers' skill have more influence on the compensation compare to power.Following that,it analysed the sentivities of the performance of M&A to different compensation components and found that the incentive plan in the compensation is the most sentive to the performance.In the third part,similar to the analysis above,it analysied the rent-seeking profit and compensation's impact on the performance of M&A,and foud that better are the compensation,better the performance is.However the result of rent-seeking profit is opposite to the compensation.And compensation has more influence on the performace.Further according to the groups of risk preference,it found that risk preference have better performance,which is different from the orginal theory.And in this paper,it gave a simple explain to this matter,which is not approved now.