Political Affiliation and Pay Slice: Do Blue CEOs Accept Less Green?

9 Pages Posted: 17 Sep 2018

See all articles by Richard Borghesi

Richard Borghesi

University of South Florida-Sarasota

Kiyoung Chang

University of South Florida Sarasota-Manatee - College of Business

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Date Written: September 1, 2018

Abstract

We examine the relationship among CEO political alignment, compensation, and pay disparity (relative to other high‐earning executives) and find that Democratic CEOs accept less pay and a significantly lower pay slice. That is, left‐leaning CEOs put their money where their mouth is regarding the Democratic ideology of economic and social equity. This smaller pay gap is not a function of variations in managerial ability; if anything, Democratic CEOs are more talented than Republican CEOs. Results suggest that Democratic CEOs may be more effective at running firms in which collaboration among top executives is more valuable than are the potential gains from tournament incentives.

Suggested Citation

Borghesi, Richard and Chang, Kiyoung, Political Affiliation and Pay Slice: Do Blue CEOs Accept Less Green? (September 1, 2018). International Review of Finance, Vol. 18, Issue 3, pp. 453-461, 2018. Available at SSRN: https://ssrn.com/abstract=3244737 or http://dx.doi.org/10.1111/irfi.12133

Richard Borghesi (Contact Author)

University of South Florida-Sarasota ( email )

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Kiyoung Chang

University of South Florida Sarasota-Manatee - College of Business ( email )

8350 N. Tamiami Trail, SMC-C263
Sarasota, FL 34243-2025
United States
9413594359 (Phone)
9413594367 (Fax)

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