The Price of a CEO's Rolodex
50 Pages Posted: 21 Mar 2009 Last revised: 30 May 2012
Date Written: May 2012
CEOs with large networks earn more than those with small networks. An additional connection to an executive or director outside the firm increases compensation by about $17,000 on average, more so for “important” members such as CEOs of big firms. Pay-for-connectivity is unrelated to several measures of corporate governance, evidence in favor of an efficient contracting explanation for CEO pay.
Keywords: Executive Compensation, Social Network
JEL Classification: G30
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