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CEO Equity Incentive and Antitakeover Provision

이준엽|이은서|유소진
한국국제회계학회 (Korea International Accounting Association)|2019.02|국제회계연구 (Korea International Accounting Review)|제83호|pp. 229-249|DOI 10.21073/kiar.2019..83.010

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CEO경영권방어수단Antitakeover ProvisionEquity Incentive주식보상유인

초록

This study examines the association between CEO equity incentive (vega incentive) and antitakeover provision (ATP). The CEO is likely to influence all important corporate decisions (Graham et al. 2015), and CEO equity incentive is known to be an important determinant of the CEO’s decision (Graham et al. 2013). In this study, we hypothesize that the association between CEO equity incentive and ATP would be significantly meaningful because of the following. 1) The CEO has the greatest informational advantage regarding merger and acquisition (Harris and Raviv 2005), suggesting that the CEO might take a lead role in ATP adoption, if necessary, and 2) The CEO cares strongly about the outcome of a decision when his compensation is heavily related to incentive－based (Graham et al. 2015). Using a sample of 4,255 firm－year observations listed on NYSE, AMEX, and NASDAQ in the United States from 1998－2014, we find that CEO equity incentive is significantly and positively associated with ATP. This result implies that when CEO compensation is heavily related to equity incentive, the CEO is likely to adopt more ATP measurements. We provide evidence that CEO equity incentive is an important determinant of ATP. Further, our results suggest that structure of CEO compensation should be carefully designed when ATP is adopted.

Abstract

This study examines the association between CEO equity incentive (vega incentive) and antitakeover provision (ATP). The CEO is likely to influence all important corporate decisions (Graham et al. 2015), and CEO equity incentive is known to be an important determinant of the CEO’s decision (Graham et al. 2013). In this study, we hypothesize that the association between CEO equity incentive and ATP would be significantly meaningful because of the following. 1) The CEO has the greatest informational advantage regarding merger and acquisition (Harris and Raviv 2005), suggesting that the CEO might take a lead role in ATP adoption, if necessary, and 2) The CEO cares strongly about the outcome of a decision when his compensation is heavily related to incentive－based (Graham et al. 2015). Using a sample of 4,255 firm－year observations listed on NYSE, AMEX, and NASDAQ in the United States from 1998－2014, we find that CEO equity incentive is significantly and positively associated with ATP. This result implies that when CEO compensation is heavily related to equity incentive, the CEO is likely to adopt more ATP measurements. We provide evidence that CEO equity incentive is an important determinant of ATP. Further, our results suggest that structure of CEO compensation should be carefully designed when ATP is adopted.

참고문헌 (50)

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