The Response of Deferred Executive Compensation to Changes in Tax Rates

Aspen Gorry, Kevin Hassett, Robert Hubbard and Aparna Mathur ()

No 21516, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: G30 H24 H32 J33 (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-hrm and nep-pub
Note: PE
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Published as Aspen Gorry & Kevin A. Hassett & R. Glenn Hubbard & Aparna Mathur, 2015. "The response of deferred executive compensation to changes in tax rates," Journal of Public Economics, vol ().
Published as The Response of Deferred Executive Compensation to Changes in Tax Rates , Aspen Gorry, Kevin A. Hassett, R. Glenn Hubbard, Aparna Mathur. in Personal Income Taxation and Household Behavior (TAPES) , Gordon and Keuschnigg. 2016

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Related works:
Chapter: The Response of Deferred Executive Compensation to Changes in Tax Rates (2017)
Journal Article: The response of deferred executive compensation to changes in tax rates (2017)
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