Acquisition Experience and Director Remuneration

Acquisition Experience and Director Remuneration

Addis Birhanu, Philipp Geiler, Luc Renneboog, Yang Zhao

Series number :

Serial Number: 

Date posted :

July 26 2020

Last revised :

July 26 2020
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  • M&A • 
  • Mergers • 
  • remuneration contracting • 
  • Compensation • 
  • experience • 
  • human capital

We investigate whether acquisition experience of executive and non-executive directors is priced in their remuneration. We find that acquisition experience generates a contractual premium, and the relative size of this premium is higher for non-executive directors than for executives.

Only a director’s track record related to past successful acquisitions is priced. Acquisition experience at the individual director is not remunerated if this type of experience is already abundantly present in the firm through the firm’s past acquisition record or via the experience of the other board members. We verify the results by examining potential endogeneity concerns, by analyzing a broad set of different views on acquisition experience (such as industry-specific, broad or international experience, experience on a target’s board), and by ruling out alternative explanations (such as a director’s general skills level or reputation).


Real name:
Addis Birhanu
Real name:
Philipp Geiler
EMLYON Business School
Real name:
Yang Zhao