IBS Lunchtime Research Seminar - Compensational Faultlines and Cross-Border Acquisitions: How TMT Pay Disparities and CEO Pay Slice Shape Unrelated International Expansion

You are cordially invited to attend an International Business and Strategy Departmental Research Meeting, during which there will be a presentation by Dr Anish Purkaysatha (Dunning Fellow). A reminder that attendance for IBS (full time, research oriented) staff and full-time students is compulsory, and where possible, must be in person. Individuals unable to attend in person, due to legitimate reasons will be provided a Teams link on request. Non-IBS staff are welcome to attend. If you have not received the email invite please email Angie Clark

Please join the seminar online or join in Room 108 for a cinematic experience with lunch.

Please make sure you let me know in advance if you intend to attend in person so that the correct amount of catering is booked.

Date: Wednesday 25th March 2026, HBS Room 108/online

Time: 13.00 - 14.30

Abstract:

This study investigates how compensation-based faultlines within top management teams (TMTs) shape the propensity and magnitude of unrelated cross-border acquisitions (CBAs). Drawing on Behavioral Agency Theory and the Strategic Leadership Systems perspective, we argue that pay-based subgroup divisions erode the collective motivation, information exchange, and coordinated decision-making capacity necessary to evaluate and commit to complex international deals. Using Average Silhouette Width (ASW) to operationalize faultline strength, we hypothesize that stronger compensational faultlines reduce both the likelihood of pursuing unrelated CBAs and the total value of deals completed. We further theorize that CEO Pay Slice moderates these relationships, as CEO pay dominance concentrates strategic authority and substitutes for fractured peer coordination. Hypotheses are tested on a longitudinal panel of S&P 1500 firms. This research contributes to upper echelons theory by establishing intra-TMT pay structure as a source of strategically consequential faultlines, and extends internalization theory by demonstrating that the transaction cost calculus of cross-border expansion is shaped not only by firm- and market-level factors but also by the compensation architecture of the decision-making team tasked with evaluating foreign targets