The large compensation received by bank executives is among the many factors blamed for the risk-taking that led to the 2008-2009 financial crisis. We test whether and how pay disparities between CEO and non-CEO executives—the so-called CEO pay gap—influenced risk taking at publicly traded...

This paper examines the relation between managerial power and compensation for Chief Executive Officers of S&P 500 companies from 1993 through 2012. We find that more-powerful CEOs earn more than less-powerful CEOs. We refer to this additional compensation as a “power premium” and...

This article sets out the case for repealing the $1 million tax cap on executive pay. The cap is easily avoided and, when not avoided, widely ignored. Since enactment in 1993, the cap has had little effect in reducing executive pay or in linking pay to performance. Even worse, the cap increases...

This study investigates the relation between the use of explicit employment agreements (EA) and CEO compensation. Overall, our findings are broadly consistent with the predictions of Klein, Crawford, and Alchian (1978) that an EA is used to induce CEOs to make firm-specific human capital...

Recent regulation and legislation, along with the growing influence of compensation consultants and proxy advisors, have led to an increase in performance-contingent awards. A majority of these awards contain performance conditions tied explicitly to accounting measures. Both the structure of...

This M.A. dissertation presents a study of the influence of financial distress on CEO compensation in the United States. It focuses on the four main components of executive compensation: salary, bonus, restricted stock and stock options. More specifically, I apply linear regression to panel data...

While compensation consultants are known to play an important role in the design of executive compensation contracts, evidence on the effect of compensation consultants on CEO pay is mixed. Using a sample of 3,198 compensation consultant engagements and 576 executive compensation consulting fee...

A model is presented of the mechanisms that drive CEO pay (at Swedish, large cap public corporations). Given that the model describes what actually goes on in the negotiating process ‐ based on extensive interviews ‐ a norm/satisfaction hypothesis might be more relevant in explaining that...

We investigate the role of pensions as an element of total executive compensation, and the relationship between pensions and performance-based compensation in executive pay. Using hand-collected data on FTSE 100 CEOs and senior executives from 2004-2011, we document that pensions function as a...

Contrary to the entrenchment view of executive compensation, I find that CEOs with more control over the firm, proxied by higher equity ownership, have smaller compensation packages and are less likely to have severance contracts. Despite lower pay, these CEOs have longer tenure and their...