Earticle

초록

영어

This study examines the impact of CEO equity-based compensation (EBC) on employee wages. Using pay-performance sensitivities (PPS) as a proxy for EBC and labor expenses as a proxy for employee wages, we conduct multivariate analysis (OLS models) and find that CEOs with higher EBC tend to pay their employees lower wages. We also examine the impact of EBC on average employee wages in different industries and find that such an impact is more evident in non-technology firms than in technology firms. Finally, we find that CEOs with higher PPS are more likely to depress employee wages when the business cycle shows a downturn. While the literature on CEO compensation suggests that EBC can mitigate agency conflicts between managers and shareholders, we suggest that high levels of EBC can create another aspect of the agency conflicts, contributing to income inequality even within corporations.

목차

Abstract
 1. Introduction
 2. Literature Review and Hypothesis Development
  2.1 Equity-based Compensation to Reduce Agency Conflicts
  2.2 Equity-Based Compensation (EBC) and Employee Wages
  2.3 Employee Wages Relative to Capital Structure
  2.4 EBC, Employee Wages, and Technology Firms
  2.5 EBC, Employee Wages, and Financial Distress
 3. Data and Methodology
  3.1 Data
  3.2 CEO Equity-Based Compensation (EBC)
  3.3 Employee Wages, Capital Structure and Pay-Performance Sensitivity
 4. Results
  4.1 Main Results
  4.2 Heckman Two-Step Analysis
  4.3 Technology versus Non-Technology Firms
  4.4 Business Cycles
  4.5 Robustness Checks
 5. Conclusion
 References

키워드

저자

• Rachel Graefe-Anderson [ Assistant Professor, University of Mary Washington ]
• Unyong Pyo [ Associate Professor of Finance, Department of Finance, Operations, and Information Systems, Goodman School of Business, Brock University, St. Catharines, ON, Canada ] Corresponding author
• Baoqi Zhu [ Static Data Analyst at the BMO Financial Group ]

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간행물

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• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330