{"title":"CEO compensation: Facts","authors":"Gian Luca Clementi , Thomas Cooley","doi":"10.1016/j.red.2023.07.006","DOIUrl":null,"url":null,"abstract":"<div><p>In this paper we highlight a few striking features of CEO compensation in the US from 1994 to 2020. For the purpose of measuring both the level and sensitivity of compensation, we define the latter as the year–on–year change in the portion of the executive's wealth tied to the firm. Compared to a narrower definition often adopted in the literature to measure levels, the cross-sectional distribution displays much higher skewness and variation. Each year, a sizable fraction of chief executives lose money. During the second decade of this century, the award of options kept declining, while stock grants became more plentiful. In net, the dollar value of CEOs' position in their respective company did not keep up with the growth in capitalization. This contributes to explaining why the semi-elasticity of compensation with respect shareholder wealth has declined.</p></div>","PeriodicalId":47890,"journal":{"name":"Review of Economic Dynamics","volume":"50 ","pages":"Pages 6-27"},"PeriodicalIF":2.3000,"publicationDate":"2023-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Review of Economic Dynamics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1094202523000406","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
In this paper we highlight a few striking features of CEO compensation in the US from 1994 to 2020. For the purpose of measuring both the level and sensitivity of compensation, we define the latter as the year–on–year change in the portion of the executive's wealth tied to the firm. Compared to a narrower definition often adopted in the literature to measure levels, the cross-sectional distribution displays much higher skewness and variation. Each year, a sizable fraction of chief executives lose money. During the second decade of this century, the award of options kept declining, while stock grants became more plentiful. In net, the dollar value of CEOs' position in their respective company did not keep up with the growth in capitalization. This contributes to explaining why the semi-elasticity of compensation with respect shareholder wealth has declined.
期刊介绍：
Review of Economic Dynamics publishes meritorious original contributions to dynamic economics. The scope of the journal is intended to be broad and to reflect the view of the Society for Economic Dynamics that the field of economics is unified by the scientific approach to economics. We will publish contributions in any area of economics provided they meet the highest standards of scientific research.
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