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The Anglo-Saxon premium in foreign CEO compensation

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  • Chen, Xiaoqi
  • Torsin, Wouter
  • Zhang, Dayong

Abstract

This paper examines whether foreign CEOs coming from Anglo-Saxon countries receive higher compensation than other foreign CEOs. The findings reveal a strongly positive association between Anglo-Saxon nationality and CEO compensation, including cash and non-cash components; and this finding is limited to a subset of firms that are headquartered in non-culturally and non-ethnically diverse counties. We interpret these findings as firms rewarding CEOs more for their perceived fit within the company given their shared cultural and social values, rather than Anglo-Saxon CEOs having higher rent-extracting capacities. Finally, the CEO's country of origin does not explain current and future firm financial performance.

Suggested Citation

  • Chen, Xiaoqi & Torsin, Wouter & Zhang, Dayong, 2022. "The Anglo-Saxon premium in foreign CEO compensation," Finance Research Letters, Elsevier, vol. 47(PA).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321005249
    DOI: 10.1016/j.frl.2021.102572
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    References listed on IDEAS

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