Executive Compensation: Facts

44 Pages Posted: 27 Aug 2010  

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)

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Date Written: October 6, 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. Notable facts are that: the compensation distribution is highly skewed; each year, a sizeable fraction of chief executives lose money; the use of security grants has increased over time; the income accruing to CEOs from the sale of stock 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.

Keywords: CEO, Pay–Performance Sensitivity, Stock, Options

JEL Classification: G34, J33, M52

Suggested Citation

Clementi, Gian Luca and Cooley , Thomas F., Executive Compensation: Facts (October 6, 2009). FEEM Working Paper No. 89.2010. Available at SSRN: https://ssrn.com/abstract=1666822 or http://dx.doi.org/10.2139/ssrn.1666822

Gian Luca Clementi (Contact Author)

New York University - Leonard N. Stern School of Business ( email )

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New York, NY 10012
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National Bureau of Economic Research (NBER) ( email )

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University of Bologna - Rimini Center for Economic Analysis (RCEA) ( email )

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Thomas F. Cooley

New York University - Leonard N. Stern School of Business ( email )

44 West Fourth Street, 7-180
Room 7-85
New York, NY 10012
United States
212-998-0870 (Phone)
212-995-4218 (Fax)

National Bureau of Economic Research (NBER)

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