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The Public Perception and Normative Valuation of Executive Compensation: An International Comparison

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  • Andreas Kuhn

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    This paper describes individuals' perceptions and normative valuations of executive compensation using comparable survey data for fifteen OECD member countries. An overwhelming majority of individuals (more than 90%) believes that top executives earn more than they actually deserve. However, there is also substantial variation in the actual and ethical levels of executive compensation, both within and across countries. The empirical analysis further shows that subjective estimates of executive pay are associated with objective measures of inequality and redistribution, and that individuals' perceptions and normative valuations of executive compensation are associated with their more general political preferences.

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    File URL: http://www.labornrn.at/wp/2010/wp1013.pdf
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    Paper provided by The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria in its series NRN working papers with number 2010-13.

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    Length: 31 pages
    Date of creation: Nov 2010
    Handle: RePEc:jku:nrnwps:2010_13
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    NRN Labor Economics and the Welfare State, c/o Rudolf Winter-Ebmer, Altenbergerstr. 69, 4040 Linz

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    16. Gary Charness & David I. Levine, 2000. "When are Layoffs Acceptable? Evidence from a Quasi-Experiment," ILR Review, Cornell University, ILR School, vol. 53(3), pages 381-400, April.
    17. Jensen, Michael C & Murphy, Kevin J, 1990. "Performance Pay and Top-Management Incentives," Journal of Political Economy, University of Chicago Press, vol. 98(2), pages 225-264, April.
    18. Bebchuk, Lucian A. & Fried, Jesse M., 2003. "Executive Compensation as an Agency Problem," Berkeley Olin Program in Law & Economics, Working Paper Series qt81q3136r, Berkeley Olin Program in Law & Economics.
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    21. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
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