Executive compensation in Europe: realized gains from stock-based pay

Patricia Kotnik and Mustafa Erdem Sakinç

Review of International Political Economy, 2023, vol. 30, issue 3, 1017-1045

Abstract: Shareholder value ideology and the rise of executive pay are widely acknowledged but only partly explored aspects of financialization. This paper adds to the empirical evidence on the extent to which stock-based pay incentivizes and rewards corporate executives, demonstrating that CEO pay, and hence pay inequality, is substantially under-stated in Europe. It shows that the actual realized gains (that is, take-home compensation) from stock-based pay of CEOs in the largest European companies are underestimated by the use of ‘fair value’ measures, in the case of some countries dramatically. We base our work on a sample of 301 large, publicly-traded companies listed in the S&P Europe 350 index from 11 EU countries. We document that on average half of the total compensation of the European CEOs in our sample is stock-based, measured by actual realized gains, with differences among countries. Based on our work, we argue that realized gains measures of CEO pay should be the standard for assessing the incentives and rewards of senior corporate executives in Europe. We consider this to be a preliminary step to question shareholder value-based corporate strategies in Europe.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/09692290.2022.2078397 (text/html)
Access to full text is restricted to subscribers.

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:taf:rripxx:v:30:y:2023:i:3:p:1017-1045

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rrip20

DOI: 10.1080/09692290.2022.2078397

Access Statistics for this article

Review of International Political Economy is currently edited by Gregory Chin, Juliet Johnson, Daniel Mügge, Kevin Gallagher, Ilene Grabel and Cornelia Woll

More articles in Review of International Political Economy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().