Final published version
Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Was Adam Smith right?
T2 - evidence of compensating differential in CEO pay?
AU - Homroy, Swarnodeep
PY - 2016/1
Y1 - 2016/1
N2 - This paper estimates the compensating differential in CEO pay for the increasing risk of dismissal using contracted severance pay eligibility of the CEO as the main instrument. US CEOs receive a 3 per cent premium in pay for each percentage point increase in the risk of dismissal. In pointing to the dismissal risk as a determinant of CEO pay, these findings contribute to the debate on the recent growth in CEO pay and the potential impacts of governance reforms.
AB - This paper estimates the compensating differential in CEO pay for the increasing risk of dismissal using contracted severance pay eligibility of the CEO as the main instrument. US CEOs receive a 3 per cent premium in pay for each percentage point increase in the risk of dismissal. In pointing to the dismissal risk as a determinant of CEO pay, these findings contribute to the debate on the recent growth in CEO pay and the potential impacts of governance reforms.
U2 - 10.1111/manc.12086
DO - 10.1111/manc.12086
M3 - Journal article
VL - 84
SP - 1
EP - 24
JO - Manchester School
JF - Manchester School
SN - 1463-6786
IS - 1
ER -