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Are US CEOs Paid More Than UK CEOs? Inferences From Risk-Adjusted Pay

Conyon, Martin and Core, John and Guay, Wayne R. (2011) Are US CEOs Paid More Than UK CEOs? Inferences From Risk-Adjusted Pay. Review of Financial Studies, 24 (2). pp. 402-408. ISSN 0893-9454

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Abstract

We compute and compare risk-adjusted CEO pay in the United States and United Kingdom, where the risk adjustment is based on estimated risk premiums stemming from the equity incentives borne by CEOs. Controlling for firm and industry characteristics, we find that U.S. CEOs have higher pay, but also bear much higher stock and option incentives than U.K. CEOs. Using reasonable estimates of risk premiums, we find that risk-adjusted U.S. CEO pay does not appear to be large compared to that of U.K. CEOs. We also examine differences in pay and equity incentives between a sample of non-U.K. European CEOs and a matched sample of U.S. CEOs, and find that risk-adjusting pay may explain about half of the apparent higher pay for U.S. CEOs

Item Type: Article
Journal or Publication Title: Review of Financial Studies
Uncontrolled Keywords: executive pay ; remuneration
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Departments: Lancaster University Management School > Accounting & Finance
ID Code: 54496
Deposited By: ep_importer_pure
Deposited On: 25 Jun 2012 14:35
Refereed?: Yes
Published?: Published
Last Modified: 19 Dec 2013 15:09
Identification Number:
URI: http://eprints.lancs.ac.uk/id/eprint/54496

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