| In recent years, the executive compensation of listed companies in our countryhas increased rapidly. The executive compensation isn·t usually related to firmperformance, which has caused the attention, anxiety and anger of the shareholders,news media and the public. Facing the huge pressure of shareholders and the societyfrom all walks of life, the disorderly behavior of executive on pay has decreased,however the chaos of executive compensation doesn·t get the fundamental change, thedisorderly behavior of executive on pay is likely to be camouflaged. In order to avoidthe discontent and anger of the shareholders and the society from all walks of life,managers had to tread carefully. Merger and acquisition activities provide managers areasonable excuse to improve their compensation. On the one hand, managers spend alot of extra time and effort in the mergers and acquisitions; On the other hand, theincremental enterprise scale and staff numbers after mergers and acquisitions increasethe difficulty of the management. Thus, CEO will make full use of the timing ofmergers and acquisitions to increase their pay.This paper studies the effect of CEO power and CEO pay slice on enterprisevalue in acquisitions by using405acquiring firms listed in Shanghai SecuritiesExchange from2008to2010. Drawing on CEO power related theory, principal-agenttheory, optimal contract theory and managerial power theory, this research constructs amodel about the effects that CEO power has on the CEO pay slice and enterprise valuein acquisitions. The empirical results show a negative relationship between CEO powerand enterprise value in acquisitions. Further CEO pay slice has significant mediatingeffects on that relationship. This study also reveals CEO power plays a significant rolein promoting CEO pay slice. Further ownership concentration has significant moderateeffects on that relationship, which weakens the influence of CEO power on CEO payslice. However, ownership concentration doesn’t have significant moderate effects onthe relationship of CEO power and enterprise value. Ownership concentration doesn’tprevent CEO power from harming enterprise value.This study empirically examines the theory of management power, and developsthe theory of management power on the relationship between CEO power and theenterprise value. At the same time, we also enriches the study of Bebchuk, etc.(2011)on CEO pay slice (CPS). This article would provide the beneficial reference forimproving corporate governance and constraining CEO power. |
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