Role of Chief Executive Officers in Takeover Resistance: Effects of CEO Incentives and Individual Characteristics

Abstract

This study examined the influence of chief executive officers' (CEO) incentives and individual characteristics on the likelihood that target firms will resist takeover attempts. Results showed that the greater the level of CEO stock ownership, the lower the likelihood of takeover resistance; however, neither the existence nor the magnitude of a CEO's “golden parachute” payment affected takeover resistance. Although CEO age had a curvilinear relationship with the likelihood of takeover resistance, CEO tenure was insignificant.