Pre-announcement Performance, Industry Membership, and Turnover of Top Managers in Canadian Takeover Targets
نویسندگان
چکیده
This study examines the pre-announcement performance of Canadian takeover targets and measures the relation between performance and the turnover rate of target firm top managers (Chief Executive Officers or Presidents) following the announcements. We find negative correlation between pre-announcement performance and the turnover rate. We find that the pre-announcement performance of targets that are paid exclusively in cash is significantly worse than the pre-announcement performance of targets that are paid by a combination of cash and securities of the bidder. In addition, we study the impact of the target’s industry membership and find the turnover rate varies significantly from one industry to another and it is particularly high for targets in the oil and gas industry.
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