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CEO Equity Incentive and Antitakeover Provision
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Publication Year
2019-02
Journal
국제회계연구
Publisher
한국국제회계학회
Citation
국제회계연구 No.83, pp.229-249
Keyword
CEO주식보상유인경영권방어수단CEOEquity IncentiveAntitakeover Provision
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). <br>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.
ISSN
1598-3919
Language
Eng
URI
https://aurora.ajou.ac.kr/handle/2018.oak/34972
DOI
https://doi.org/10.21073/kiar.2019..83.010
Type
Article
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Lee, Junyoup  Image
Lee, Junyoup 이준엽
Department of Business Administration
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