In recent decades, most developed countries have experienced a simultaneous increase in income inequality and management compensation. In this paper, we study the relation between management compensation and firm-level income dynamics in a general equilibrium model. Empirical estimation, of the...

In a competitive managerial labor market, compensation contracts should not depend on public attitudes or social norms regarding income inequality or "fair pay". In contrast to the standard view of optimal incentive design, we find that public opinion impacts executive compensation. We show that...

There is a debate on whether executive pay reflects rent extraction due to "managerial power" or is the result of arms-length bargaining in a principal-agent framework. In this paper we offer a test of the managerial power hypothesis by empirically examining the CEO compensation of U.S. public...

The pay determining process of CEOs of UK higher education institutions is modelled using three econometric methodologies applied to a large and unique dataset for the academic years 1997/98 through to 2005/06. A gender differential in pay is detected and this differential remains robust across...