Are U.S. CEOs paid more? New international evidence

Nuno Fernandes; Miguel A. Ferreira; Pedro Matos; Kevin J. Murphy

doi:10.1093/rfs/hhs122

Are U.S. CEOs paid more? New international evidence

Nuno Fernandes, Miguel A. Ferreira, Pedro Matos, Kevin J. Murphy^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

168 Citations (Scopus)

Abstract

This paper challenges the widely accepted stylized fact that chief executive officers (CEOs) in the United States are paid significantly more than their foreign counterparts. Using CEO pay data across fourteen countries with mandated pay disclosures, we show that the U.S. pay premium is economically modest and primarily reflects the performance-based pay demanded by institutional shareholders and independent boards. Indeed, we find no significant difference in either level of CEO pay or the use of equity-based pay between U.S. and non-U.S. firms exposed to international and U.S. capital, product, and labor markets. We also show that U.S. and non-U.S. CEO pay has largely converged in the 2000s.

Original language	English
Pages (from-to)	323-367
Number of pages	45
Journal	Review of Financial Studies
Volume	26
Issue number	2
DOIs	https://doi.org/10.1093/rfs/hhs122
Publication status	Published - Feb 2013
Externally published	Yes

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AB - This paper challenges the widely accepted stylized fact that chief executive officers (CEOs) in the United States are paid significantly more than their foreign counterparts. Using CEO pay data across fourteen countries with mandated pay disclosures, we show that the U.S. pay premium is economically modest and primarily reflects the performance-based pay demanded by institutional shareholders and independent boards. Indeed, we find no significant difference in either level of CEO pay or the use of equity-based pay between U.S. and non-U.S. firms exposed to international and U.S. capital, product, and labor markets. We also show that U.S. and non-U.S. CEO pay has largely converged in the 2000s.

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Are U.S. CEOs paid more? New international evidence

Abstract

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