Work

Wealth and Executive Compensation

Year: 2006

Type: article

Abstract: ABSTRACT Using new data on the wealth of Swedish CEOs, I show that higher wealth CEOs receive stronger incentives. Since high wealth (excluding own‐firm holdings) implies low absolute risk aversion, this is consistent with a risk aversion explanation. To examine whether wealth is likely to proxy for power, I use lagged wealth (typically measured before the CEO was hired), and the results remain for one of two incentive measures. Also, the wealth–incentive result is not stronger for CEOs likely to face limited owner oversight. Finally, wealth is unrelated to pay levels, and is hence unlikely to proxy for skill.

Source: The Journal of Finance

DOI: 10.1111/j.1540-6261.2006.00839.x

Author: BO BECKER

Institutions: University of Illinois Urbana-Champaign, University of Chicago

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2026474402

FWCI: 29.28

Cites: 24

Cited by: 137

Related to: 10