Download This PaperSymmetry in Pay for Luck
Review of Financial Studies, Forthcoming
43 Pages Posted: 11 Oct 2012 Last revised: 25 Jul 2019
Date Written: March 7, 2019
Abstract
In this study, we take a comprehensive look at asymmetry in pay for luck, which is the finding that CEOs are rewarded for good luck, but are not penalized to the same extent for bad luck. Our main takeaway –– based on over 200 different specifications –– is that there is no asymmetry in pay for luck. Our finding is important given that the literature widely accepts the idea of asymmetry in pay for luck and typically points to this as evidence of rent extraction.
Keywords: Asymmetry in Pay for Luck, Pay for Luck, Relative Performance Evaluation, Pay-for-Performance, Compensation, Incentive Alignment
JEL Classification: G32, G34
Suggested Citation: Suggested Citation
Lalitha Naveen (Contact Author)
Temple University - Department of Finance ( email )
Fox School of Business and Management
Philadelphia, PA 19122
United States
215-204-6435 (Phone)
European Corporate Governance Institute (ECGI)
c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium
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