Does Stakeholder Outrage Determine Executive Pay?
Type
PreprintAbstract
An unprecedented number of firms announced CEO salary reductions at the onset of the coronavirus pandemic, which we argue was triggered by an exogenous increase in stakeholder outrage toward executive pay. We document that the overall compensation of these CEOs did not meaningfully ...
See moreAn unprecedented number of firms announced CEO salary reductions at the onset of the coronavirus pandemic, which we argue was triggered by an exogenous increase in stakeholder outrage toward executive pay. We document that the overall compensation of these CEOs did not meaningfully decrease compared to other CEOs due to a large reallocation to opaque components of compensation and perks, especially among powerful CEOs and firms with weak governance. Our results are robust to alternative explanations of CEO pay-setting. We highlight the role of managerial power in determining executive compensation and the importance of strong corporate governance during crises.
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See moreAn unprecedented number of firms announced CEO salary reductions at the onset of the coronavirus pandemic, which we argue was triggered by an exogenous increase in stakeholder outrage toward executive pay. We document that the overall compensation of these CEOs did not meaningfully decrease compared to other CEOs due to a large reallocation to opaque components of compensation and perks, especially among powerful CEOs and firms with weak governance. Our results are robust to alternative explanations of CEO pay-setting. We highlight the role of managerial power in determining executive compensation and the importance of strong corporate governance during crises.
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Date
2022Licence
OtherFaculty/School
The University of Sydney Business SchoolShare