全球智库信息集成服务系统(G2TT): Growth through Rigidity: An Explanation for the Rise in CEO Pay

G2TT

来源类型	Working Paper
规范类型	报告
DOI	10.3386/w21975
来源ID	Working Paper 21975
	Growth through Rigidity: An Explanation for the Rise in CEO Pay
	Kelly Shue; Richard Townsend
发表日期	2016-02-08
出版年	2016
语种	英语
摘要	The dramatic rise in CEO compensation during the 1990s and early 2000s is a longstanding puzzle. In this paper, we show that much of the rise can be explained by a tendency of firms to grant the same number of options each year. Number-rigidity implies that the grant-date value of option awards will grow with firm equity returns, which were very high on average during the tech boom. Further, other forms of CEO compensation did not adjust to offset the dramatic growth in the value of option pay. Number-rigidity in options can also explain the increased dispersion in pay, the difference in growth between the US and other countries, and the increased correlation between pay and firm-specific equity returns. We present evidence that number-rigidity arose from a lack of sophistication about option valuation that is akin to money illusion. We show that regulatory changes requiring transparent expensing of the grant-date value of options led to a decline in number-rigidity and helps explain why executive pay increased less with equity returns during the housing boom in the mid-2000s.
主题	Microeconomics ; Behavioral Economics ; Financial Economics ; Corporate Finance ; Labor Economics ; Labor Compensation ; Other ; Law and Economics ; Accounting, Marketing, and Personnel
URL	https://www.nber.org/papers/w21975
来源智库	National Bureau of Economic Research (United States)
引用统计
资源类型	智库出版物
条目标识符	http://119.78.100.153/handle/2XGU8XDN/579648
推荐引用方式 GB/T 7714	Kelly Shue,Richard Townsend. Growth through Rigidity: An Explanation for the Rise in CEO Pay. 2016.

条目包含的文件
文件名称/大小	资源类型	版本类型	开放类型	使用许可
w21975.pdf（1275KB）	智库出版物		限制开放	CC BY-NC-SA	浏览