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The response of deferred executive compensation to changes in tax rates

Aspen Gorry, Kevin A. Hassett, R. Glenn Hubbard and Aparna Mathur

Journal of Public Economics, 2017, vol. 151, issue C, 28-40

Abstract: Given the increasing use of stock options in executive compensation, we examine how taxes influence the choice of compensation and document that income deferral is an important margin of adjustment in response to tax rate changes. To account for this option in the empirical analysis, we explore deferral by estimating how executives' choice of compensation between current and deferred income depends on changes in tax policy. Our empirical results suggest a significant impact of taxes on the composition of executive compensation.

Keywords: Deferred income; Executive compensation; Tax policy; Elasticity of taxable income (search for similar items in EconPapers)
JEL-codes: G30 H24 H32 J33 (search for similar items in EconPapers)
Date: 2017
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Chapter: The Response of Deferred Executive Compensation to Changes in Tax Rates (2017)
Working Paper: The Response of Deferred Executive Compensation to Changes in Tax Rates (2015) Downloads
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DOI: 10.1016/j.jpubeco.2015.08.003

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