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The impact of firm prestige on executive compensation

Listed author(s):
  • Focke, Florens
  • Maug, Ernst
  • Niessen-Ruenzi, Alexandra
Registered author(s):

    We show that chief executive officers (CEOs) of prestigious firms earn less. Total compensation is on average 8% lower for firms listed in Fortune’s ranking of America’s most admired companies. We suggest that CEOs are willing to trade off status and career benefits from working for a publicly admired company against additional monetary compensation. Our identification strategy is based on matched sample analyses, difference-in-differences regressions, and a regression discontinuity design. We perform several robustness checks and exclude many alternative explanations, including that firm prestige just proxies for better corporate governance or for increased exposure of the pay-setting process to media attention.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0304405X16301799
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    Article provided by Elsevier in its journal Journal of Financial Economics.

    Volume (Year): 123 (2017)
    Issue (Month): 2 ()
    Pages: 313-336

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    Handle: RePEc:eee:jfinec:v:123:y:2017:i:2:p:313-336
    DOI: 10.1016/j.jfineco.2016.09.011
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505576

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