Governance structures and the compensation of powerful corporate leaders in financial firms during M&As

Henry Agyei-Boapeah, Collins G. Ntim, Samuel Fosu

Research output: Contribution to journalArticlepeer-review

15 Citations (Scopus)


We examine the impact of mergers and acquisitions (M&As) on the compensation of powerful corporate leaders [i.e., boards of directors, including Chief Executives Officers (CEOs), Chief Financial Officers (CFOs), and Board Chairs] of acquiring firms. Using one of the largest datasets on M&As, directors’ compensation, and governance to-date, consisting of a sample of UK financials (banks, insurance firms, private equity firms, and speciality finance firms) over a 13-year period, our results obtained by employing multivariate regression analyses show that acquisitions, on average, have a positive and significant impact on directors’ compensation. This effect applies to both powerful corporate executives (CEOs, CFOs, and all other executive directors) and other non-executive directors. However, the positive acquisition effect on top executive compensation is much higher in larger and more complex acquisitions. We also find that much of the acquisition-related pay raises is equity-based rather than cash-based. Finally, we find CEOs to be the top beneficiaries from acquisitions. We interpret our findings within a multi-theoretical framework that draws insights from agency, executive power, managerial talent, and tournament theories of top executive compensation.

Original languageEnglish
Article number100285
JournalJournal of International Accounting, Auditing and Taxation
Publication statusPublished - Dec 2019


  • Board of Directors
  • CEOs
  • Corporate governance
  • Executive compensation
  • Financial firms
  • M&As
  • UK

ASJC Scopus subject areas

  • Accounting
  • Finance


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