Empirical Research On The Relationship Between Executive Compensation And M&A Performance Of Listed Companies

Due to the different background of the system, the M&A theories and researchconclusions based on western mature capital markets are not fully suitable for the actualcapital market in China. The M&A has become an important corporate action. Accordingto the property rights system, the M&A is an important behavior for the enterprise torealize the capital concentration, expand scale and improve the competitiveness.Reviews domestic and foreign research on M&A performance, there are a large partof the performance of mergers and acquisitions is not ideal, because the value of thecompany after the merger is destroyed. But even so, mergers and acquisitions is still thethe popular strategy for the company’s management. Therefore, research on M&Adecision-making of the motivations of the managers is necessary. In the field of M&Aresearch in our country, most of the research perspectives focus on the company’s controlbackground and characteristics of equity, and neglected the study of the motivation ofM&A decision makers. For the study of managers’ motivations, executive pay isdefinitely the best breakthrough point.This article uses the method combining the theoretical analysis and empirical test.Empirical analysis is the main method, and theoretical analysis is the auxiliary method.In this paper, the executive compensation is divided into three categories:(1)compensation and salary;(2) on-the-job consumption;(3) stock, stock options. In theoryanalysis, the theoretical basis is the theory of principal-agent and risk preference theory,and this paper adopts the definition and system background analysis and other methods.In the empirical test, there are description statistic, correlation analysis and regressionanalysis, and respectively test the relationship between different categories of executivepay and the M&A performance, and respectively test between different categories ofexecutive pay and corporate M&A performance whether there is sticky.The structure of the thesis is mainly divided into six parts, the main contents are asfollows:The first part is the introduction. Firstly, it introduces the background of the researchand significance this paper. Secondly, it briefly introduces the research mentality and theframe of this paper. Finally, it briefly describes the research methods and the innovativeparts. The second part is the literature review. Firstly, it will sum up the concept and themotive of M&A. Secondly, it will outline the evaluation method of M&A performance,the last is the literature review of the M&A influences from executive compensation theresearch literature of the executive compensation viscous.The third part is the theoretical analysis which is the theoretical basis of the thesis. Itwill analyze the relationship between the executive compensation and the M&Aperformance theoretically based on the principal-agent theory and the risk preferencetheory. It will also define and classify as well as briefly describe the process of theexecutive compensation.The fourth part is the empirical research design. It will expound the researchhypotheses, the selection of variable, the definition as well as the source of the sampleand the data. It will also introduce the establishment of the model used in this paper.The fifth part is the empirical results and conclusion. Firstly, it will analyze theresult of the relation between executive compensation and M&A performance. Secondly,it will analyze whether the viscosity of executive compensation exists in the process ofmerger and acquisition of listing corporations. And last, it will draw a conclusion.The sixth part will point out suggestions and the further research direction in viewof the empirical conclusions.