원문정보
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
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