CEO attributes, compensation, and firm value: Evidence from a structural estimation

• 成果类型: Article
• 署名作者: Page, T. Beau
• 署名单位: Tulane University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2018.02.006
• 发表日期: 2018
• 页码: 378-401
• 关键词: ceo compensation; Dynamic principal-agent model; structural estimation

摘要

I present and estimate a dynamic model of chief executive officer (CEO) compensation and effort provision. I find that variation in CEO attributes explains the majority of variation in compensation (equity and total) but little of the variation in firm value. The primary drivers of cross-sectional compensation are risk aversion and influence on the board. Additionally, I estimate the magnitude of CEO agency issues. Removing CEO influence increases shareholder value in the typical firm by 1.74%, making CEOs risk neutral increases shareholder value by 16.12%, and removing all agency frictions increases shareholder value by 28.99%. (C) 2018 Elsevier B.V. All rights reserved.