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Managerial incentives and corporate control auctions
Author(s) -
Banerjee Ajeyo,
Owers James E.
Publication year - 1993
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4090140403
Subject(s) - bidding , white (mutation) , cash , common value auction , business , incentive , economics , accounting , finance , microeconomics , marketing , biochemistry , chemistry , gene
An analysis of the sequence of bidding in corporate control contests involving white knights reveals a category of white knights termed as ‘delayed bid’ white knights who make their bid after two consecutive hostile bids. The ‘immediate bid’ white knights make their bid in relative haste after the first hostile bid. Overpayments by white knights are much larger for the ‘immediate bid’ white knights. An analysis of the respective compensation packages shows that the managers of the ‘immediate bid’ white knights have a lower proportion of their income linked to stock value (relative to their annual cash income) compared to ‘delayed bid’ white knights and hostile bidders.