Does Price Fixing Benefit Corporate Managers?

Tanja Artiga Gonzalez, Markus Schmid and David Yermack ()

No 1309, Working Papers on Finance from University of St. Gallen, School of Finance

Abstract: We study the effects of cartel participation on top corporate managers. Although a strong public interest exists in regulating price fixing, we find little evidence that either corporate governance or the legal system holds managers of cartel firms accountable. Instead, managers of cartel firms enjoy greater job security, receive higher cash bonuses, and extract more ex post compensation through timely exercise of stock options. Legal sanctions against individual managers are infrequent, with enforcement actions focused on corporations rather than their officers. Managers appear to use concealment strategies actively to limit detection of cartel membership by their boards and auditors.

Keywords: Price fixing; corporate governance; executive compensation (search for similar items in EconPapers)
JEL-codes: D43 G34 K42 L40 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2013-03, Revised 2017-09
New Economics Papers: this item is included in nep-hme
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Does Price Fixing Benefit Corporate Managers? (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:usg:sfwpfi:2013:09

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