Topic: Unpacking the Contingencies: On Director Acquisition Experience and Compensation
Lecturer:Zhao Yang, Department of Finance, Newcastle University, UK
Time: 09:00-11:00 a.m. 11th of July 2018（Wednesday）
Venue: B321, Zhixin Building
Abstract: Using insights from human capital and agency theories, we investigate the contingencies that explain the variation in the compensation premium due to director acquisition experience in the UK. We construct a simple model and show that director acquisition experience has a compensation premium. More importantly, our model reveals that the compensation premium depends on the extent to which this experience (1) is scarce in the firm, (2) can be effectively utilized with limited conflict of interest, and (3) is related to successful track records of acquisition. Our findings are robust to controlling for various director and firm-level characteristics, and are confirmed in multiple robustness analyses.