This chapter summarizes the empirical and theoretical research on executive compensation and provides a comprehensive and up-to-date description of pay practices (and trends in pay practices) for chief executive officers (CEOs). Topics discussed include the level and structure of CEO pay...

Public outrage over executive compensation reached an all time high during the financial crisis. Around the world, many argued that CEOs and boards were immoral in setting their pay and pressured governments to impose restrictions on executive pay. Using a unique sample of data on human values...

How do we prevent financial institutions from taking excessive risk when the public fisc serves as their ultimate creditor? This is one of the central questions left over after the recent financial crisis and, for the past five years, there has been no shortage of proposed answers. Two of the...

We examine the efficacy of proxy voting to limit inflated CEO pay. We find that the percentage of dissenting votes that go against director-sponsored compensation proposals increases following a staggered rejection of the Inevitable Disclosure Doctrine (RIDD), which increases CEOs’ job...

This study explores corporate responses to 1993 legislation, implemented as section 162(m) of the Internal Revenue Code, that capped the corporate tax deductibility of top management compensation at $1 million per executive unless it qualified as substantially "performance-based." We detail the...

We study the pay of UK universities chief executives ("vice-chancellors") over a ten year period. Although there is a correlation between pay and performance, with better performing institutions paying higher salaries, we find limited evidence that this relationship is causal; that is, we find...

The litmus test for an effective compensation program is whether it provides “pay for performance.” While the concept of pay for performance is simple, its implementation is not. In particular, boards must consider not only whether a compensation plan encourages executives to pursue...

We study compensation packages in family and non-family firms. Using matched employeremployeedata for a representative sample of French establishments, we first show thatfamily firms pay on average lower wages to their workers. We find that part of this wage gapis due to differences in...

We study how workers’ wages respond to TFP-driven innovations in firms’ labor productivity.Using unique data with highly reliable firm-level output prices and quantities in themanufacturing sector in Sweden, we are able to derive measures of physical (as opposed torevenue) TFP to instrument...

We investigate the observable determinants of sorting between salary and performace pay jobs, the extent to which wage functions differ between the two, and the magnitude of the unobserved ability differential between salary and performance pay workers...