Gold for now and the golden years: Effects of CEO stock options and retirement pay on cross-border acquisitions

dc.contributor.authorLewellyn, Krista B.
dc.date.accessioned2022-10-21T01:32:17Z
dc.date.available2022-10-21T01:32:17Z
dc.date.issued2018-07-09
dc.description.abstractAbstract Purpose The purpose of this paper is to draw from regulatory focus theory, to examine the effects of the “gain/no gain” nature of stock options and retirement pay on the decision to engage in cross-border acquisitions. The moderating effects of managerial discretion arising from the external industry context and internal organizational leadership structure are also examined. Design/methodology/approach The authors employ random effects negative binomial regression analysis with a longitudinal (2006–2016) data set of US public companies operating in four industries with differing levels of industry discretion: the oil and gas, paper and packaging, aerospace and defense, and telecommunications. Findings The findings indicate that both CEO in-the-money stock options and retirement pay are positively related to cross-border acquisition activity. The results also demonstrate that managerial discretion, arising from the firm’s external industry context, accentuates the positive relationship between both the value of CEO in-the-money stock options and retirement pay with cross-border acquisition activity. Practical implications The findings provide implication for practice as understanding how retirement pay and stock options, both of which make up a substantial portion of overall CEO pay in the USA, motivate cross-border acquisition activity, may improve decisions by executives. The evidence also provides guidance to boards of directors who are charged with the responsibility of creating CEO compensation contracts. Originality/value The paper fills important gaps in the existing research on the influence of compensation elements on firm outcomes, by offering a novel explanation for how in-the-money stock options and retirement pay affect CEOs’ motivations to engage in cross-border acquisitions.en_US
dc.identifier.citationLewellyn, K. (2018), "Gold for now and the golden years: Effects of CEO stock options and retirement pay on cross-border acquisitions", Journal of Strategy and Management, Vol. 11 No. 3, pp. 306-327. https://doi.org/10.1108/JSMA-08-2017-0062en_US
dc.identifier.issn1755-425X
dc.identifier.urihttp://hdl.handle.net/11416/883
dc.language.isoen_USen_US
dc.publisherEmerald Insighten_US
dc.subjectStocksen_US
dc.subjectChief executive officersen_US
dc.titleGold for now and the golden years: Effects of CEO stock options and retirement pay on cross-border acquisitionsen_US
dc.typeArticleen_US

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