| Summary: | 碩士 === 國立交通大學 === 財務金融研究所 === 103 === This paper focuses on the question that whether the incentive compensation can induce CEOs to complete the M&;As. Moreover, we also attempt to examine the relationship among incentive compensation, market reaction, and completion of the M&;As in this study. The findings of this study verify that CEOs with higher incentive compensation to their total compensation can be induced to complete the M&;As. However, there is a negative relationship between incentive compensation and the completion of the M&;As when the M&;As accompany positive market reaction. The friendly M&;As and the deals which are paying by cash are more likely to be consummated. Besides, this paper demonstrates that when the market reaction is better, the M&;As are more likely to be completed. Even though the market reaction to the deals is negative, CEOs also consummate the M&;As as long as the incentive compensation is high enough. Finally, this study confirms that CEOs with higher incentive compensation in the acquiring firms damage the shareholders’ long-term returns in the form of overpayment.
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