What Do We Know About Executive Compensation at Small Privately Held Firms?

58 Pages Posted: 5 Nov 2015 Last revised: 2 Sep 2016

See all articles by Rebel A. Cole

Rebel A. Cole

Florida Atlantic University

Hamid Mehran


Date Written: November 3, 2015


We examine executive compensation using data from two nationally representative samples of small privately held U.S. corporations conducted ten years apart — in 1993 and 2003. We find that executive pay at small privately held firms increases with firm size and varies widely by industry, consistent with stylized facts about executive pay at public companies. From 1993-2003, inflation-adjusted executive pay declined at small privately held companies, in contrast with the run-up in executive pay at large public companies over the same period. Executive pay is higher at more complex organizations; is inversely related to CEO ownership and financial risk; and is related to CEO age, education and gender.

Keywords: CEO; Compensation; Executive Pay; Organizational Form; SSBF

JEL Classification: H24, H25, G32, J33, M13, M52

Suggested Citation

Cole, Rebel A. and Mehran, Hamid, What Do We Know About Executive Compensation at Small Privately Held Firms? (November 3, 2015). Small Business Economics 46, 215-237, February 2016, Available at SSRN: https://ssrn.com/abstract=2685936

Rebel A. Cole (Contact Author)

Florida Atlantic University ( email )

College of Business
777 Glades Road
Boca Raton, FL 33431
United States
1-561-297-4969 (Phone)

HOME PAGE: http://rebelcole.com

Hamid Mehran

Independent ( email )

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