Executive Pensions

Lucian Bebchuk () and Robert J. Jackson, Jr.

No 11907, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Because public firms are not required to disclose the monetary value of pension plans in their executive pay disclosures, financial economists have generally analyzed executive pay using figures that do not include the value of such pension plans. This paper presents evidence that omitting the value of pension benefits significantly undermines the accuracy of existing estimates of executive pay, its variability, and its sensitivity to performance companies. Studying the pension arrangements of CEOs of S&P 500, we find that the CEOs' plans had a median actuarial value of $15 million; that the ratio of the executives' pension value to the executives' total compensation (including both equity and non-equity pay) during their service as CEO had a median value of 34%; and that including pension values increased the median percentage of the executives' total compensation composed of salary-like payments during and after their service as CEO from 15% to 39%.

JEL-codes: D23 G32 G34 G38 J33 (search for similar items in EconPapers)
Date: 2005-12
New Economics Papers: this item is included in nep-bec and nep-fin
Note: CF LS
References: Add references at CitEc
Citations: View citations in EconPapers (19)

Published as Bebchuk, Lucian and Robert Jackson. “Executive Pensions.” Journal of Corporation Law 30 (2005): 823-855.

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