Working Paper: NBER ID: w15426
Authors: Gian Luca Clementi; Thomas F. Cooley
Abstract: In this paper we describe the important features of executive compensation in the US from 1993 to 2006. Some confirm what has been found for earlier periods and some are novel. Important facts about compensation are that: the compensation distribution is highly skewed; each year, a sizeable fraction of chief executives lose money; the use of equity grants has increased; the income accruing to CEOs from the sale of stock has increased; regardless of the measure we adopt, compensation responds strongly to innovations in shareholder wealth; measured as dollar changes in compensation, incentives have strengthened over time, measured as percentage changes in wealth, they have not changed in any appreciable way.
Keywords: Executive Compensation; Shareholder Wealth; Incentive Structures
JEL Codes: G30; J33; M52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Shareholder wealth (G39) | CEO compensation (M12) |
| CEO compensation (M12) | Shareholder wealth (G39) |
| Shareholder wealth (G39) | Executive pay (M12) |