Are CEOs Rewarded for Luck? Evidence from Corporate Tax Windfalls

• 成果类型: Article
• 署名作者: Andreani, Martina; Ellahie, Atif; Shivakumar, Lakshmanan
• 署名单位: INSEAD Business School; Utah System of Higher Education; University of Utah; University of London; London Business School
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13448
• 发表日期: 2025
• 页码: 2255-2302
• 关键词: executive turnover; DYNAMIC AGENCY; COMPENSATION; governance; pay; determinants; valuation; IMPACT; FIRMS

摘要

Focusing on the one-off tax gains and losses (i.e., windfalls) associated with the 2017 Tax Cuts and Jobs Act, we reexamine whether CEOs are rewarded for luck. We find that weakly monitored CEOs are compensated for the windfall tax gains but not penalized for the corresponding tax losses. No such pattern is observed for CEOs facing greater pay scrutiny. The pay for windfalls cannot be explained as rewards for CEOs' efforts, talents, political activities, or as firms sharing their tax gains with all executives. The results are more consistent with rent extraction by CEOs facing weak pay scrutiny.