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https://hdl.handle.net/2440/116597
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Type: | Journal article |
Title: | Determinants of CEO compensation: generalist - specialist versus insider - outsider attributes |
Author: | Brockman, P. Lee, H. Salas, J. |
Citation: | Journal of Corporate Finance, 2016; 39:53-77 |
Publisher: | Elsevier |
Issue Date: | 2016 |
ISSN: | 0929-1199 1872-6313 |
Statement of Responsibility: | Paul Brockman, Hye Seung (Grace) Lee, Jesus M.Salas |
Abstract: | We examine the distinct effects of generalist–specialist versus insider–outsider attributes on Chief Executive Officer (CEO) compensation patterns. Our cross-sectional results show that each attribute has a significant impact on both the level and structure of CEO compensation. CEOs with a high generalist–outsider combination receive the highest total compensation, followed by generalist–insiders, specialist–outsiders, and finally specialist–insiders. Our time-series results show that the generalist–specialist effect remains constant through time while the insider–outsider effect diminishes over time. These findings suggest that the generalist premium is the result of a fundamental shift in the need for generalist skills to manage increasingly-complex enterprises. In contrast, the outsider premium is more likely caused by a temporary increase in bargaining power during contract negotiations. Overall, our study disentangles generalist–specialist attributes from insider–outsider attributes and then identifies the specific channels through which each attribute affects executive compensation. |
Keywords: | Executive compensation; CEO insiderness; generalist skills |
Rights: | © 2016 Elsevier B.V. All rights reserved. |
DOI: | 10.1016/j.jcorpfin.2016.04.007 |
Published version: | http://dx.doi.org/10.1016/j.jcorpfin.2016.04.007 |
Appears in Collections: | Aurora harvest 8 Economics publications |
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