Aвтор: Yuri Tserlukevich (W. P. Carey School of Business, Arizona State University)
In the course of the lecture Yuri Tserlukevich will present his recent research. The authors analyze how rank-and-file employee compensation contracts of target firms affect the negotiations of merger terms and merger outcomes. Using unique data from merger agreements, the authors document that in 80.6% of all deals at least some of the targetís employee stock options are canceled by the acquirer. Employees lose approximately half of their option value in the average M&A deal. By exploiting the exogenous variation in option grants, we find that the offer price premium is larger when the target firm has many employee options. Further, the bidders that cancel stock options earn on average 1.5% higher announcement return. The authors find no evidence of strategic targeting of firms with options. The results are consistent with the bidders trading of the costs of compensation liabilities against the resistance of employees.
After the lecture interested students will have the opportunity to get information on applying and studying at a PhD program at Arizona State University.
