EconPapers    
Economics at your fingertips  
 

CEO power and the structure of CEO pay

Chongwoo Choe (), Gloria Y. Tian and Xiangkang Yin

International Review of Financial Analysis, 2014, vol. 35, issue C, 237-248

Abstract: This paper fleshes out the rent extraction view of CEO compensation put forward by the managerial power theory (Bebchuk, Fried, & Walker, 2002), and tests its main implications on the relation between CEO power and the structure of CEO pay. For a measure of CEO power most relevant to managerial power theory, we use the CEO pay slice due to Bebchuk, Cremers, and Peyer (2011). Based on the sample of S&P 500 firms for the period of 1999–2008, we find that the implied relation between power and pay is largely supported. Our findings suggest that the managerial power theory has relevance in explaining the relation between power and pay when the focus is on managerial bargaining power. Given the multiple dimensions of CEO power, however, the scope of power may need to be broadened for a better understanding of how managerial power affects firm performance.

Keywords: Managerial power; CEO pay; Stock-based compensation (search for similar items in EconPapers)
JEL-codes: D82 G32 J33 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521914001343
Full text for ScienceDirect subscribers only

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:eee:finana:v:35:y:2014:i:c:p:237-248

DOI: 10.1016/j.irfa.2014.10.004

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-01-06
Handle: RePEc:eee:finana:v:35:y:2014:i:c:p:237-248