 A shock to CEOs' external environment: terrorist attacks and CEO payRebecca L. Bachmann, Anna Bedford, Samir Ghannam and Jin Sug Yang Pacific-Basin Finance Journal, 2023, vol. 77, issue C Abstract: We examine whether CEO compensation increases in firms located near a terrorist attack. We first replicate and confirm the findings of Dai et al. (2020) in the US setting using the original sample and an extended sample. Consistent with Dai et al. (2020) we document a causal link between terrorist attack proximity and CEO compensation, suggesting that CEOs use their bargaining power to extract additional compensation after a deterioration in their external environment. When we extend this analysis to the Australian setting, we find a positive association between CEO compensation and terrorist attack proximity, only for CEOs with higher bargaining power. Specifically, we find that Australian CEOs negotiate higher compensation after a terrorist attack when (i) board monitoring is weak and consists of majority non-independent directors and (ii) the local executive labor market provides more employment opportunities to the CEO. Keywords: Terrorist attacks; CEO compensation; Board independence; Executive labor market (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:77:y:2023:i:c:s0927538x2300001x DOI: 10.1016/j.pacfin.2023.101935 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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