One dollar CEOs

Gilberto Loureiro, Anil K. Makhija and Dan Zhang

Journal of Business Research, 2020, vol. 109, issue C, 425-439

Abstract: We study the impact of $1 CEO salaries on firm performance and CEO total compensation. We find that, on average, $1 CEO firms earn higher total compensation and lower stock market returns relative to their peers after the adoption of $1 salaries. The effect on total compensation is mitigated if the $1 CEO firm is undergoing restructuring or the CEO is entrenched and aggravated if the CEO is overconfident. The stock market underperformance especially affects firms not under a restructuring process and firms with entrenched or overconfident CEOs.

Keywords: CEO compensation; CEO characteristics; Firm performance; Restructuring; Entrenched CEOs (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:109:y:2020:i:c:p:425-439

DOI: 10.1016/j.jbusres.2019.11.086

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