Executive Compensation and Executive Contributions to Corporate PACs
Kathleen A. Farrell
University of Nebraska-Lincoln
Philip L. Hersch
Wichita State University - W. Frank Barton School of Business - Department of Economics
Jeffry M. Netter
University of Georgia - Department of Banking and Finance; University of Georgia Law School
This paper estimates the determinants of the contributions made by top executives to their firm's Political Action Committee (PAC). We find that executive's personal PAC contributions (proxy for the interest of the firm) are positively related to their shareholdings, income and option holdings (proxies for the interests of the executive). Contributions are also higher for CEOs and board members. This is direct evidence that the structure of the contracts between the firm and management, especially compensation, aligns manager's personal behavior with the interests of the firm.
Number of Pages in PDF File: 27
Keywords: Executive compensation, political contribution
JEL Classification: D72, G34, J33working papers series
Date posted: April 20, 2001
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo3 in 0.491 seconds