Executive Compensation: Facts

Clementi, Gian Luca; Cooley , Thomas F.

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Executive Compensation: Facts

NBER Working Paper No. w15426

40 Pages Posted: 23 Oct 2009 Last revised: 24 Feb 2025

See all articles by Gian Luca Clementi

Gian Luca Clementi

New York University - Leonard N. Stern School of Business; National Bureau of Economic Research (NBER); University of Bologna - Rimini Center for Economic Analysis (RCEA)

Thomas F. Cooley

New York University - Leonard N. Stern School of Business; National Bureau of Economic Research (NBER)

There are 2 versions of this paper

Date Written: October 2009

Abstract

In this paper we describe the important features of executive compensation in the US from 1993 to 2006. Some confirm what has been found for earlier periods and some are novel. Important facts about compensation are that: the compensation distribution is highly skewed; each year, a sizeable fraction of chief executives lose money; the use of equity grants has increased; the income accruing to CEOs from the sale of stock has increased; regardless of the measure we adopt, compensation responds strongly to innovations in shareholder wealth; measured as dollar changes in compensation, incentives have strengthened over time, measured as percentage changes in wealth, they have not changed in any appreciable way.

Suggested Citation: Suggested Citation

Clementi, Gian Luca and Cooley, Thomas F., Executive Compensation: Facts (October 2009). NBER Working Paper No. w15426, Available at SSRN: https://ssrn.com/abstract=1493019