The Market for CEOs: Building Legacy and Feeling Empowered Matter

Arnaud Dupuy (), John Kennes and Ran Sun Lyng ()
Additional contact information
Ran Sun Lyng: University of Toronto

No 14803, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We develop a two-sided multidimensional matching model of the market for CEOs that allows for both pecuniary and non-pecuniary (amenity) compensation. The model is estimated by maximum likelihood estimation using matched CEO-firm data from Denmark. We show that CEOs have preferences for building legacy and gaining empowerment. The legacy mechanism explains why there is low mobility in the CEO market, even though firms demand general CEO skills. The empowerment mechanism explains why CEOs are willing to sacrifice significant pecuniary income to manage high equity firms. The overall conclusion is that job amenities matter in the market for CEOs.

Keywords: multidimensional matching; observed transfers; structural estimation; value of job amenities; taxation; CEO compensation; CEO performance (search for similar items in EconPapers)
JEL-codes: C35 C78 D22 D31 G30 J3 M12 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2021-10
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-cwa, nep-des, nep-eur, nep-lma and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://docs.iza.org/dp14803.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp14803

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().