Effects of managerial labor market on executive compensation: Evidence from job-hopping

• 成果类型: Article
• 署名作者: Gao, Huasheng; Luo, Juan; Tang, Tilan
• 署名单位: Nanyang Technological University; University of Adelaide; Clemson University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2015.02.001
• 发表日期: 2015
• 关键词: ceo pay; Equity compensation; performance; incentives; networks; turnover

摘要

We find that companies dramatically raise their incumbent executives' pay, especially equity-based pay, after losing executives to other firms. The pay raise is larger when incumbent executives have greater employment mobility in the labor market, when companies lose senior executives, and when job-hopping executives receive favorable job offers in their new firms. A company's subsequent pay raise to incumbent executives after losing an executive diminishes its deficiency in executive compensation relative to its industry peer firms, and is effective at retaining its incumbent executives. Overall, our evidence suggests that executive job-hopping activity has significant effects on firms' compensation policies. (C) 2015 Elsevier B.V. All rights reserved.