Purpose

This paper aims to study the impact of external fairness of executive compensation on M&A premium, and examine the moderate role of institutional investors. The high M&A premium is the main factors that induce the huge impairment of listed companies’ goodwill and the plummeting performance. Executives are the decision-makers of M&As, and their decision-making process is inevitably affected by the psychological factors. In recent years, institutional investors have become an important external force that can affect the governance of listed companies.

Design/Methodology/Approach

The authors use M&A data of listed companies from 2008 to 2018 and use OLS regression to test the relationship between executive compensation fairness and M&A premium.

Findings

The results show that the lower the external fairness of executive compensation, the greater the M&A premium. Institutional investors can effectively reduce the impact of external compensation unfairness on M&A premiums. The mechanism tests show that executives' psychological perception of fairness induced by external unfairness reduces their motivation to work and prompts them to use high premium to seek alternative compensation incentives. Further examinations of executive characteristics and corporate characteristics show that the role of external unfairness in executive compensation in driving M&A premiums is more pronounced in companies with longer executive tenure, weaker executive reputation incentives and private property.

Originality/Value

This paper enriches the research on the pre-factors of M&A premiums from the perspective of executives’ psychological perception of fairness, provides evidence that institutional investors play a positive governance role and provides decision-making references for companies to take corresponding measures to reduce M&A premium risks.

中文翻译：

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高管薪酬、机构投资者和并购溢价的外部公平性

目的

本文旨在研究高管薪酬外部公平对并购溢价的影响，并考察机构投资者的调节作用。高额的并购溢价是导致上市公司商誉大幅减值、业绩暴跌的主要因素。高管是并购的决策者，其决策过程不可避免地受到心理因素的影响。近年来，机构​​投资者已成为影响上市公司治理的重要外部力量。

设计/方法论/方法

作者利用2008-2018年上市公司并购数据，运用OLS回归检验高管薪酬公平性与并购溢价的关系。

发现

结果表明，高管薪酬的外部公平性越低，并购溢价越大。机构投资者可以有效降低外部薪酬不公平对并购溢价的影响。机制检验表明，外部不公平引起的高管对公平的心理认知会降低其工作动力，促使其利用高溢价寻求替代性薪酬激励。对高管特征和企业特征的进一步考察表明，高管薪酬的外部不公平对推动并购溢价的作用在高管任期较长、高管声誉激励较弱和私有财产的公司中更为明显。

原创性/价值

本文从高管的公平心理感知视角丰富了并购溢价的前置因素研究，为机构投资者发挥积极治理作用提供证据，为企业采取相应措施降低并购溢价提供决策参考。风险。