Mergers, executive compensation and firm performance: The case of Africa

This study examines the impact of executive compensation on firm performance after successful mergers and acquisitions (M&A) in Africa between 2005 and 2016. Using accounting and financial performance measures and controlling for firm, deal and corporate governance factors, we show that executive compensation induced by M&A in Africa negatively affect the performance of listed firms. There is also evidence to support the impact of firm size, deal size, target destination, foreign ownership, diversification, outside board representation and executive ownership on the pay-performance nexus. Besides, corporate governance factors in Africa, generally, worsen firm performance, especially for cash and total pay.