Do common inherited beliefs and values influence CEO pay?
Journal
Journal of Accounting and Economics
Subject
Accounting
Publishing details
Publication Year
2017
Abstract
We use the ethnicity of CEOs across 31 countries as a proxy for their common inherited beliefs and values and find an ethnicity effect in CEO compensation. We find that the ethnicity effect in variable pay is not driven by the ethnicity effects in corporate policy decisions, and that changes in CEO compensation are significantly larger when CEOs are replaced with a person from a different ethnicity. Our estimated ethnicity effect capture the future time reference and religion of CEOs' ancestors. Finally, we find an ethnicity effect in performance-firing sensitivities (i.e., the sensitivity to being fired due to poor performance).
Keywords
Executive compensation; CEO characteristics; Ethnicity; Cultural persistence
Available on ECCH
No
