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Are US CEOs Paid More? New International EvidenceNuno Goncalves Gracias FernandesIMD International Miguel A. FerreiraNova School of Business and Economics; European Corporate Governance Institute (ECGI) Pedro P. MatosUniversity of Virginia - Darden School of Business; European Corporate Governance Institute (ECGI) Kevin J. MurphyUniversity of Southern California - Marshall School of Business; University of Southern California - Department of Economics; USC Gould School of Law May 22, 2012 EFA 2009 Bergen Meetings Paper AFA 2011 Denver Meetings Paper ECGI - Finance Working Paper No. 255/2009 Abstract: This paper challenges the widely accepted stylized fact that CEOs in the United States are paid significantly more than their foreign counterparts. Using CEO pay data across 14 countries with mandated pay disclosures, we show that the US pay premium is economically modest and primarily reflects the performance-based pay demanded by institutional shareholders and independent boards. Indeed, we find no significant difference in either level of CEO pay or the use of equity-based pay between US and non-US firms exposed to international and US capital, product, and labor markets. We also show that US and non-US CEO pay has largely converged in the 2000s. The findings are robust to alternative methods for adjusting the risk of equity-based pay.
Number of Pages in PDF File: 50 Keywords: Executive compensation, CEO pay, International pay differences, Stock options, Corporate governance JEL Classification: G32, G34, G38 working papers seriesDate posted: February 12, 2009 ; Last revised: June 19, 2012Suggested CitationContact Information
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