What's in it for me? Personal Benefits Obtained by CEOs Whose Firms Are Acquired
July 2000
Jay Hartzell, Eli Ofek, and David Yermack
ABSTRACT
We study benefits received by target company CEOs in completed mergers and acquisitions. These executives obtain
wealth increases with a median of $4 to $5 million and a mean of $8 to $11 million, roughly in line with the permanent
income streams that they sacrifice. CEOs receive lower financial gains from those transactions in which they become
executives of the buyer, suggesting that tradeoffs exist between the financial and career-related benefits they
extract. Regression estimates suggest that target shareholders receive lower acquisition premia in transactions
that involve extraordinary personal treatment of the CEO.
Subject: Corporate Finance/M&A
Classification: Empirical
Jay Hartzell
Institution: Stern School of Business, New York University
Email: jhartzel@stern.nyu.edu
Phone: (212) 998-0359
Home Page: http://www.stern.nyu.edu/~jhartzel/
Eli Ofek
Institution: Stern School of Business, New York University
Email: eofek@stern.nyu.edu
Phone: (212) 998-0356
Home Page: http://www.stern.nyu.edu/~eofek/
David Yermack
Institution: Stern School of Business, New York University
Email: dyermack@stern.nyu.edu
Phone: (212) 998-0357
Home Page: http://www.stern.nyu.edu/~dyermack/
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