EconPapers    
Economics at your fingertips  
 

Executive Compensation and Competition in the Banking and Financial Sectors

Vicente Cuñat () and Maria Guadalupe ()

FMG Discussion Papers from Financial Markets Group

Abstract: This paper studies the effect of deregulation and increased product market competition on the compensation packages that firms offer to their executives. We use a panel of US executives in the nineties and exploit the deregulation episodes in the banking and financial sectors as quasi-natural experiments. We provide difference-in-differences estimates of their effect on (1) total pay, (2) estimated fixed pay and performance-pay sensitivities and (3) on the sensitivity of stock option grants. Our results indicate that the deregulations substantially changed the level and structure of compensation: the variable components of pay increased, performance-pay sensitivities grew and, at the same time, the fixed component of pay fell. The overall effect on total pay was small.JEL codes: M52, L1, J31Keywords: Executive compensation; performance related pay; incentives; product market competition; deregulation.

Date: 2007-10
New Economics Papers: this item is included in nep-ban, nep-com and nep-lab
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.lse.ac.uk/fmg/workingPapers/discussionPapers/fmgdps/dp598.pdf (application/pdf)

Related works:
Journal Article: Executive compensation and competition in the banking and financial sectors (2009) Downloads
Working Paper: Executive compensation and competition in the banking and financial sectors (2007) Downloads
Working Paper: Executive Compensation and Competition in the Banking and Financial Sectors (2004) Downloads
Working Paper: Executive Compensation and Competition in the Banking and Financial Sectors (2004) Downloads
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:fmg:fmgdps:dp598

Access Statistics for this paper

More papers in FMG Discussion Papers from Financial Markets Group
Bibliographic data for series maintained by The FMG Administration ().

 
Page updated 2021-10-19
Handle: RePEc:fmg:fmgdps:dp598