An ill wind? Terrorist attacks and CEO compensation

• 成果类型: Article
• 署名作者: Dai, Yunhao; Rau, P. Raghavendra; Stouraitis, Aris; Tan, Weiqiang
• 署名单位: Huazhong University of Science & Technology; University of Cambridge; Hong Kong Baptist University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2019.06.005
• 发表日期: 2020
• 页码: 379-398
• 关键词: Terrorist attacks; Executive compensation; Compensation structure; CEO labor market; Nonmonetary compensation

摘要

Using multiple measures of attack proximity, we show that CEOs employed at firms located near terrorist attacks earn an average pay increase of 12% after the attack relative to CEOs at firms located far from attacks. CEOs at terrorist attack-proximate firms prefer cash-based compensation increases (e.g., salary and bonus) over equity-based compensation (e.g., options and stocks granted). The effect is causal and it is larger when the bargaining power of the CEO is high. Other executives and workers do not receive a terrorist attack premium. (C) 2019 Elsevier B.V. All rights reserved.