Albuquerque, Ana M.; Albuquerque, Rui A.; Carter, Mary Ellen - 2021
This paper estimates the risk premium in CEO incentive compensation. Using detailed U.S. CEO contract compensation data … and simulation analysis, we find that CEOs with riskier pay packages are paid more. The estimated risk premium from total … incentive pay represents 15% of total pay. We further decompose the risk premium between the premium that comes from bonus …