Making Sense of One Dollar CEO Salaries

• 成果类型: Article
• 署名作者: Hamm, Sophia J. W.; Jung, Michael J.; Wang, Clare
• 署名单位: University System of Ohio; Ohio State University; New York University; Northwestern University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12136
• 发表日期: 2015
• 页码: 941-972
• 关键词: performance-measures; EQUITY GRANTS; COMPENSATION; incentives; OWNERSHIP; CONTRACTS; firm

摘要

We examine the determinants and outcomes of Chief Executive Officers (CEOs) accepting a $1 salary, a compensation practice that occurs relatively frequently in high-profile firms and is debated by regulators, investors, and the media. Using a hand-collected sample of 93 CEOs from 91 firms between 1993 and 2011, we examine the triggers preceding the $1 salary decision, the factors associated with the decision, subsequent stock returns, and the outcomes for the CEOs. Our evidence is consistent with two explanations for the phenomenon: (i) it is a gesture of sacrifice by CEOs of firms in crisis, and (ii) it is a signal of better future performance by CEOs of growing firms. Our analyses highlight the two different circumstances and shed light on an interesting debate that has thus far been supported only by anecdotal evidence.