The CEO pay slice

Bebchuk, Lucian Arye; Cremers, K. J. Martijn; Peyer, Urs

doi:10.1016/j.jfineco.2011.05.006

Cited by 828 publications

(794 citation statements)

References 42 publications

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“…However, as Table 2 shows, the economic significance of the difference is low, given that 36% and 33% of the top executive pay goes to the CEO in the U.S. and non-U.S. countries, respectively. Similar to the Bebchuk et al (2011) process for their U.S. sample, we separate the CEO PAY SLICE measure into its equity and nonequity components. The measure of the CEO's slice of equity compensation, denoted CEO E, shows that of those firms that pay their executives with equity, 33% of the equity-based incentive compensation goes to the CEO, in contrast to 28% to the CEO in non-U.S. countries.…”

Section: B Executive Compensationmentioning

confidence: 99%

“…Similarly, Becker (1996) suggests that culture changes slowly over time. Bebchuk et al (2011) suggest that the disparity in pay between the CEO and the other executives should reflect whether the firm has a team or dominant leadership style. Thomas (2004) argues that the dispersed ownership structure of U.S. companies gives U.S. CEOs more power relative to shareholder-control dominated systems, implying that U.S. CEOs should be paid more.…”

Section: Hofstede Measures Of Culturementioning

confidence: 99%

“…However, previous research based on single country analyses presents conflicting results regarding the association of firm value with CEO tournaments, with some finding a positive association (e.g., Kale et al (2009)) and others finding no association or a negative association (e.g., Rajgopal and Srinivasan (2006), Bebchuk, Cremers, and Peyer (2011)). 2 In this paper, we examine the CEO tournament structure across countries, incorporating cultural differences into the analysis.…”

Section: Introductionmentioning

confidence: 96%

See 2 more Smart Citations

CEO Tournaments: A Cross-Country Analysis of Causes, Cultural Influences, and Consequences

Burns¹,

Minnick

Starks

2017

J. Financ. Quant. Anal.

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Using a cross-country sample, we examine the chief executive officer (CEO) tournament structure (measured alternatively as the ratio and the difference of pay between the CEO and other top executives within a firm). We find the tournament structure to vary systematically with firm and country cultural characteristics. In particular, firm size and the cultural values of power distance, fair income differences, and competition are significantly associated with variations in tournament structures. We also establish support for the primary implication of tournament theory in that tournament structure tends to be positively related to firm value, even after controlling for endogeneity.

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Section: B Executive Compensationmentioning

confidence: 99%

Section: Hofstede Measures Of Culturementioning

confidence: 99%

Section: Introductionmentioning

confidence: 96%

See 1 more Smart Citation

CEO Tournaments: A Cross-Country Analysis of Causes, Cultural Influences, and Consequences

Burns¹,

Minnick

Starks

2017

J. Financ. Quant. Anal.

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“…However, during the negotiation of compensation contract with the board, powerful managers may take advantage of their influence over the board to maximize their personal welfare (Bertrand and Mullainathan 2001;Bebchuk and Fried 2003), which implies that high compensation may reflect the power of managers and indeed indicates weak governance of the firm. Measuring CEO's power with the proportion of the total compensation of top-five highly paid executives captured by CEO (CEO pay slice) in a given firm, Bebchuk et al (2011) find that CPS is associated with lower firm value and inferior accounting performance. Furthermore, CPS is correlated with lower stock return accompanying acquisition announcement and higher likelihood that CEOs receiving "lucky" option grant.…”

Section: Introductionmentioning

confidence: 96%

Determinants and value relevance of UK CEO pay slice

Al‐Najjar

Ding

Hussainey

2016

International Review of Applied Economics

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This paper studies the CEO Pay Slice (CPS) of UK listed firms during the period 2003 to 2009. We investigate the determinants of CPS. We study the links between CPS and measures of firm performance. We find that firms with higher levels of corporate governance ratings and those with more independent boards tend to have higher CPS. In addition, we find that CEOs are more likely to receive lower compensation when they chair the board and when they work in firms with large board size. We also find that higher CPS is positively associated with firm performance after controlling the firm-specific characteristics and corporate governance variables. We get compatible results when we examine the association between equity-based CPS and firm performance. Our results remain robust to alternative accounting measures of firm performance. Our results suggest that high UK CPS levels do indeed reflect top managerial talent rather than managerial power.

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“…We define a dummy variable that equals one if a firm has less than a majority of independent directors on its board, and zero otherwise (No majority ind). Following Bebchuk et al (2011), our second measure of CEO power is the fraction of the aggregate compensation of the top five executives captured by the CEO -the CEO Pay Slice (CPS). CPS is an indicator of the extent to which a CEO is able to extract rents.…”

Section: Power Hypothesismentioning

confidence: 99%

CEO Tenure and Risk-Taking

Chen¹,

Zheng²

2014

Glob Bus Financ Rev

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A B S T R A C TThis paper presents a systematic analysis of the effect of CEO tenure on risk-taking. We document an overall positive effect of tenure on risk-taking, which is inconsistent with a view of tenure as primarily an indicator of human capital investment. Although we cannot rule out the explanations of risk-taking based on the power and experience effects of tenure, our results are more consistent with interpreting tenure as an indicator of the career concerns of a manager. Consistent with this interpretation and recent theoretical work, we show that the effect of CEO tenure on risk-taking depends on the information asymmetry about CEO ability.

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The CEO pay slice

Cited by 828 publications

References 42 publications

CEO Tournaments: A Cross-Country Analysis of Causes, Cultural Influences, and Consequences

CEO Tournaments: A Cross-Country Analysis of Causes, Cultural Influences, and Consequences

Determinants and value relevance of UK CEO pay slice

CEO Tenure and Risk-Taking

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