CEO pay cuts and forced turnover: Their causes and consequences

2012 ◽  
Vol 18 (2) ◽  
pp. 291-310 ◽  
Author(s):  
Huasheng Gao ◽  
Jarrad Harford ◽  
Kai Li
Keyword(s):  
Ceo Pay ◽  
CFA Digest ◽  
2012 ◽  
Vol 42 (3) ◽  
pp. 32-34
Author(s):  
Mark A. Harrison
Keyword(s):  
Ceo Pay ◽  

2011 ◽  
Author(s):  
Huasheng Gao ◽  
Jarrad Harford ◽  
Kai Li
Keyword(s):  
Ceo Pay ◽  

2020 ◽  
Author(s):  
Sudarshan Jayaraman ◽  
Todd Milbourn ◽  
Florian Peters ◽  
Hojun Seo

We investigate the role of Relative Performance Evaluation (RPE) theory in CEO pay and turnover using a product similarity-based definition of peers (Hoberg and Phillips 2016). RPE predicts that firms filter out common shocks (i.e., those affecting the firm and its peers) while evaluating CEO performance and that the extent of filtering increases with the number of peers. Despite the intuitive appeal of the theory, previous tests of RPE find weak and inconsistent evidence, which we argue is due to the imprecise categorization of peers. Using product market peers, we find three pieces of evidence consistent with RPE in relation to CEO pay and forced turnover: (i) on average, firms partially filter out common shocks to stock returns, (ii) the extent of filtering increases with the number of peers, and (iii) firms completely filter out common shocks in the presence of a large number of peers.


2016 ◽  
Vol 33 ◽  
pp. 1-10 ◽  
Author(s):  
David B. Bryan ◽  
Terry W. Mason
Keyword(s):  
Ceo Pay ◽  

2021 ◽  
pp. 1-18
Author(s):  
Serena F. Hagerty ◽  
Bhavya Mohan ◽  
Michael I. Norton

Abstract Four experiments examine the impact of a firm deciding to no longer pay salaries for executives versus employees on consumer behavior, particularly in the context of the COVID-19 pandemic. Study 1 explores the effect of announcing either pay cessations or continued pay for either CEO or employees, and shows that firms’ commitment to maintaining employee pay leads to the most positive consumer reactions. Study 2 examines the effects of simultaneously announcing employee and CEO pay cessations: consumers respond most positively to firms prioritizing employee pay, regardless of their strategy for CEO pay. Moreover, these positive perceptions are mediated by perceptions of financial pain to employees, more than perceptions of CEO-to-worker pay ratio fairness. Study 3, using an incentive-compatible design, shows that firms’ commitment to paying employees their full wages matters more to consumers than cuts to executive pay, even when those executive pay cuts lead to a lower CEO-to-worker pay ratio. Study 4 tests our account in a non-COVID-19 context, and shows that consumers continue to react favorably to firms that maintain employee pay, but when loss is less salient, consumers prioritize cutting CEO pay and lowering the CEO-to-worker pay ratio. We discuss the implications of our results for firms and policymakers during economic crises.


2015 ◽  
Vol 13 (1) ◽  
pp. 26-52
Author(s):  
Pieter de Jong ◽  
Lakshmi Goel
Keyword(s):  
Ceo Pay ◽  

Author(s):  
Bill B. Francis ◽  
Kose John ◽  
Iftekhar Hasan ◽  
Maya Waisman
Keyword(s):  

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