Compas Poll / Survey

The COMPAS business panel, consisting mainly of CEOs and senior management of private companies, would clip the wings of the CEOs of public companies in M&A situations. That is the main general finding from this week’s web survey of members of the COMPAS panel of CEOs and business leaders on good laws and good practices to govern merger & acquisition situations.

Specific findings include:

Overwhelming opinion that senior managers of selling firms are receiving bonuses that are too generous or definitely too generous;
Strong majority opinion that senior managers of a firm being sold should be allowed to receive bonuses for success in achieving the sale only by vote of the shareholders of the selling firm;
A slight majority of the panel believes that M&A discussions should be led by the Board rather than the CEO; and
Only a minority (32%) believe that the senior managers of a firm selling off subsidiaries should be allowed to receive non-compete fees (i.e. for not competing with the subsidiary being sold) directly from the purchaser—45% panelists believe that senior managers should receive non-compete fees only from their employer while 19% believe that such fees should not be legal.

Panelists were asked about break fees – compensation if shareholders vote to merge with or sell to a different party (i.e. hostile bidder) than the one recommended by the board of directors. They were divided about whether the break fees should be limited to proven costs or subject to negotiation or legal in the first place.