New 'encyclopedia' on CEO pay

A new study by a team of academics reviews the theoretical and empirical literature on executive compensation. It includes evidence on boardroom pay over time and across countries, what’s driven it, and how to reform it. The report contains:

• Data on CEO and other top executive pay over time and across firms, including private firms and non-US firms.
• A critical analysis of three explanations for the drivers of pay: shareholder value maximisation by boards, rent extraction by executives and institutional influences such as regulation, taxation and accounting policy.
• The ‘effects’ of executive pay and ‘challenges in causal identification’.
• Major gaps for future research.

The authors are:

• Alex Edmans: London Business School – Institute of Finance and Accounting; European Corporate Governance Institute (ECGI); Centre for Economic Policy Research (CEPR).
• Xavier Gabaix: Harvard University – Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); New York University – Stern School of Business.
• Dirk Jenter: London School of Economics & Political Science; Centre for Economic Policy Research (CEPR).

‘Executive Compensation: A Survey of Theory and Evidence’, European Corporate Governance Institute (ECGI) – Finance Working Paper No. 514/2016, July 2017. To download the 165-page report, please visit [PDF]: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2992287