That altruism has no place in business is a commonly believed maxim. But the findings of researchers Buhui Qiu, Svetoslav Trapkov and Fadi Yakoub show that selfishness goes all the way to the top — to the CEO level. Analysing data from 2,198 successful merger and acquisition deals among US firms between 1994 and 2010, the researchers found a causal — and, more importantly, negative — link between CEO retention (in case they are not retained, the size of their severance package) and the takeover premiums received by the shareholders of the companies at the end of the process. The data seems to suggest that takeovers prompt most CEOs to bargain for a better position or a fat severance package, often at the cost of the premiums due to shareholders.
Title: Do Target Trade Premiums for Personal Benefits?
Source: Social Science Research Network
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