The Anglo-Saxon premium in foreign CEO compensation

Xiaoqi Chen, Wouter Torsin and Dayong Zhang

Finance Research Letters, 2022, vol. 47, issue PA

Abstract: This paper examines whether foreign CEOs coming from Anglo-Saxon countries receive higher compensation than other foreign CEOs. The findings reveal a strongly positive association between Anglo-Saxon nationality and CEO compensation, including cash and non-cash components; and this finding is limited to a subset of firms that are headquartered in non-culturally and non-ethnically diverse counties. We interpret these findings as firms rewarding CEOs more for their perceived fit within the company given their shared cultural and social values, rather than Anglo-Saxon CEOs having higher rent-extracting capacities. Finally, the CEO's country of origin does not explain current and future firm financial performance.

Keywords: Compensation; CEO's nationality; Cultural diversity; Financial performance (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321005249

DOI: 10.1016/j.frl.2021.102572

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