We investigate the changes in CEO wealth around large investments and derive their incentives to increase firm size. We find that CEO wealth is influenced by multiple factors, including board compensation policy, stock market mispricing and CEO's own portfolio adjustments. We argue that large firm investments accelerate the correction of the stock overvaluation. The attendant stock price decline produces a short-run negative impact on CEO's existing equity holdings, but it has a long-run positive effect on the CEO's new option grants. We also find that CEOs tend to exercise more options before undertaking large investments, suggesting attempts to avoid the loss associated with existing equity holdings. We further contribute to the literature by introducing CEO pay-for-size sensitivity, implying direct incentives to increase firm size. We find evidence that pay-for-size sensitivity is significantly higher in firms that choose to expand than those that do not.;Change-in-control covenants were first introduced at the tail-end of the LBO wave in the 1980s. We report that, like bondholders in the 1980s, bondholders lacking such covenant protection experience significantly negative wealth effects of -6.76% upon the announcement of an LBO, compared to +2.30% for bonds with protection. Furthermore, we document that firms with bonds lacking change-in-control covenants are twice as likely to be the target of an LBO. Thus, the potential for bondholder wealth expropriation plays an important role in both the design of bond contracts and the identification of suitable LBO targets.;Prior studies on the performance of a corporate asset after a change in corporate control has been mostly indirect because it is difficult to track the performance of an individual asset once it is taken private or merged into another corporation. This paper employs a unique database, which records the customers' perception of a specific brand regardless of changes in ownership. With the product market measure as a proxy for long term operating efficiency and growth prospect, I am able to re-examine how well a corporate asset is being managed under a new ownership. The findings suggest that the brand equity decreases significantly after the takeover.
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