Abstract

http://ssrn.com/abstract=1361327
 
 

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CEO Power and the Structure of CEO Pay


Chongwoo Choe


Monash University - Department of Economics

Gloria Yuan Tian


University of Lethbridge Calgary Campus; Financial Research Network (FIRN)

Xiangkang Yin


La Trobe University - La Trobe Business School; Financial Research Network (FIRN)

October 3, 2014

International Review of Financial Analysis, Forthcoming

Abstract:     
This paper fleshes out the rent extraction view of CEO compensation put forward by the managerial power theory (Bebchuk et al., 2002), and tests its main implications on the relation between CEO power and the structure of CEO pay. For a measure of CEO power most relevant to managerial power theory, we use the CEO pay slice due to Bebchuk et al. (2011). Based on the sample of S&P500 firms ovor the period of 1999-2008, we find that the implied relation between power and pay is largely supported. Our findings suggest that managerial power theory has relevance in explaining the relation between power and pay when the focus is on managerial bargaining power. Given the multiple dimensions of CEO power, however, the scope of power may need to be broadened for a better understanding of how managerial power affects firm performance.

Number of Pages in PDF File: 33

Keywords: Managerial power, CEO pay, stock-based compensation

JEL Classification: D82, G32, J33

Accepted Paper Series





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Date posted: March 30, 2009 ; Last revised: October 4, 2014

Suggested Citation

Choe, Chongwoo and Tian, Gloria Yuan and Yin, Xiangkang, CEO Power and the Structure of CEO Pay (October 3, 2014). International Review of Financial Analysis, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1361327 or http://dx.doi.org/10.2139/ssrn.1361327

Contact Information

Chongwoo Choe (Contact Author)
Monash University - Department of Economics ( email )
Department of Economics
PO Box 197
Caulfield East, Victoria 3145
Australia
+61 2 9903 1125 (Phone)
+61 2 9903 1128 (Fax)

Monash University Business and Economics Logo

Gloria Yuan Tian
University of Lethbridge Calgary Campus ( email )
6th floor, 345 - 6 Ave SE
Calgary, Alberta T2G 4V1
Canada
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

Xiangkang Yin
La Trobe University - La Trobe Business School ( email )
Melbourne, Victoria 3083
Australia
61-3-9479 1654 (Fax)
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

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