Abstract

http://ssrn.com/abstract=2100499
 


 



Orders of Merit and CEO Compensation: Evidence from a Natural Experiment


Linus Siming


Bocconi University - Department of Finance; Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research

July 4, 2012


Abstract:     
Governments worldwide bestow upon their citizens orders of merit to reward distinguished service. Swedish CEOs used to receive such awards for arriving at the top corporate position rather than for on-the-job performance once there. After a 1974 legal reform in which Sweden discontinued the conferral of orders of merit, shareholders increased CEOs’ salary to compensate for the loss of these nonmonetary external tournament awards to uphold the internal managerial tournament. The finding that orders of merit function as managerial tournament status awards has implications for our understanding of CEO compensation policies from the perspective of both firms and governments.

Number of Pages in PDF File: 46

Keywords: Executive compensation, positional good, order of merit

JEL Classification: G30, J33

working papers series


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Date posted: July 4, 2012 ; Last revised: July 30, 2014

Suggested Citation

Siming, Linus, Orders of Merit and CEO Compensation: Evidence from a Natural Experiment (July 4, 2012). Available at SSRN: http://ssrn.com/abstract=2100499 or http://dx.doi.org/10.2139/ssrn.2100499

Contact Information

Linus Siming (Contact Author)
Bocconi University - Department of Finance ( email )
Via Roentgen 1
Milano, MI 20136
Italy
Bocconi University - IGIER - Innocenzo Gasparini Institute for Economic Research ( email )
Via Roentgen 1
Milan, 20136
Italy
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