CEO Pay Slice as a measure of CEO dominance

Maxim Zagonov; Galla Salganik-Shoshan

doi:10.1016/j.ribaf.2017.07.092

CEO Pay Slice as a measure of CEO dominance

Maxim Zagonov, Galla Salganik-Shoshan

Department of Business Administration

Research output: Contribution to journal › Article › peer-review

10 Scopus citations

Abstract

CEO Pay Slice (CPS), a measure of CEO relative compensation introduced by Bebchuk, Cremers and Peyer [2011. Journal of Financial Economics 102, 199–221], is used widely in the literature as a proxy for chief executive officer dominance. Nonetheless, CPS does not control for the distribution of pay among the top executives and, as we show empirically, often misestimates the level of CEO power. As a result, its empirical application exposes researchers to the risk of drawing false conclusions. We propose a number of supplementary measures that could be used in conjunction with CPS to improve the measurement accuracy of CEO dominance.

Original language	English
Pages (from-to)	571-576
Number of pages	6
Journal	Research in International Business and Finance
Volume	45
DOIs	https://doi.org/10.1016/j.ribaf.2017.07.092
State	Published - 1 Oct 2018

Keywords

Corporate governance
Entrenchment
Executive compensation
Pay distribution

ASJC Scopus subject areas

Business, Management and Accounting (miscellaneous)
Finance

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10.1016/j.ribaf.2017.07.092

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title = "CEO Pay Slice as a measure of CEO dominance",

abstract = "CEO Pay Slice (CPS), a measure of CEO relative compensation introduced by Bebchuk, Cremers and Peyer [2011. Journal of Financial Economics 102, 199–221], is used widely in the literature as a proxy for chief executive officer dominance. Nonetheless, CPS does not control for the distribution of pay among the top executives and, as we show empirically, often misestimates the level of CEO power. As a result, its empirical application exposes researchers to the risk of drawing false conclusions. We propose a number of supplementary measures that could be used in conjunction with CPS to improve the measurement accuracy of CEO dominance.",

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AU - Salganik-Shoshan, Galla

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N2 - CEO Pay Slice (CPS), a measure of CEO relative compensation introduced by Bebchuk, Cremers and Peyer [2011. Journal of Financial Economics 102, 199–221], is used widely in the literature as a proxy for chief executive officer dominance. Nonetheless, CPS does not control for the distribution of pay among the top executives and, as we show empirically, often misestimates the level of CEO power. As a result, its empirical application exposes researchers to the risk of drawing false conclusions. We propose a number of supplementary measures that could be used in conjunction with CPS to improve the measurement accuracy of CEO dominance.

AB - CEO Pay Slice (CPS), a measure of CEO relative compensation introduced by Bebchuk, Cremers and Peyer [2011. Journal of Financial Economics 102, 199–221], is used widely in the literature as a proxy for chief executive officer dominance. Nonetheless, CPS does not control for the distribution of pay among the top executives and, as we show empirically, often misestimates the level of CEO power. As a result, its empirical application exposes researchers to the risk of drawing false conclusions. We propose a number of supplementary measures that could be used in conjunction with CPS to improve the measurement accuracy of CEO dominance.

KW - Corporate governance

KW - Entrenchment

KW - Executive compensation

KW - Pay distribution

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JF - Research in International Business and Finance

ER -

CEO Pay Slice as a measure of CEO dominance

Abstract

Keywords

ASJC Scopus subject areas

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