CEO earnings: Evidence from Danish twins

Martin Conyon, Juyeong Jeong and Steen Thomsen

Economics Letters, 2025, vol. 256, issue C

Abstract: We estimate the CEO earnings premium using Danish twin data. Ordinary least squares indicate CEOs earn 59.5% more than comparable non-CEOs. Controlling for twin-pair and firm fixed effects, which capture shared family, genetic, and workplace factors, reduces the premium substantially to 15.9%. A series of sensitivity analyses — varying income definitions, sample restrictions, firm-size interactions, and environmental controls — confirm that this reduced premium remains robust. These results suggest that a significant portion of the CEO earnings gap is explained by unobserved background factors rather than by the causal effect of CEO status itself.

Keywords: CEO earnings; Twins data; Panel data econometrics (search for similar items in EconPapers)
JEL-codes: J3 M2 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:256:y:2025:i:c:s0165176525003994

DOI: 10.1016/j.econlet.2025.112562

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