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http://ssrn.com/abstract=872743
 
 

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Executive Pensions


Lucian A. Bebchuk


Harvard Law School; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR) and European Corporate Governance Institute (ECGI)

Robert J. Jackson Jr.


Columbia Law School

December 2005

NBER Working Paper No. w11907

Abstract:     
Because public firms are not required to disclose the monetary value of pension plans in their executive pay disclosures, financial economists have generally analyzed executive pay using figures that do not include the value of such pension plans. This paper presents evidence that omitting the value of pension benefits significantly undermines the accuracy of existing estimates of executive pay, its variability, and its sensitivity to performance companies. Studying the pension arrangements of CEOs of S&P 500, we find that the CEOs' plans had a median actuarial value of $15 million; that the ratio of the executives' pension value to the executives' total compensation (including both equity and non-equity pay) during their service as CEO had a median value of 34%; and that including pension values increased the median percentage of the executives' total compensation composed of salary-like payments during and after their service as CEO from 15% to 39%.

Number of Pages in PDF File: 47

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Date posted: January 22, 2006  

Suggested Citation

Bebchuk, Lucian A. and Jackson, Robert J., Executive Pensions (December 2005). NBER Working Paper No. w11907. Available at SSRN: http://ssrn.com/abstract=872743

Contact Information

Lucian A. Bebchuk (Contact Author)
Harvard Law School ( email )
Cambridge, MA 02138
United States
617-495-3138 (Phone)
617-812-0554 (Fax)
HOME PAGE: http://www.law.harvard.edu/faculty/bebchuk/
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Centre for Economic Policy Research (CEPR) and European Corporate Governance Institute (ECGI)
Robert J. Jackson Jr.
Columbia Law School ( email )
435 West 116th Street
New York, NY 10025
United States
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