Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/250464 
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14803
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We develop a two-sided multidimensional matching model of the market for CEOs that allows for both pecuniary and non-pecuniary (amenity) compensation. The model is estimated by maximum likelihood estimation using matched CEO-firm data from Denmark. We show that CEOs have preferences for building legacy and gaining empowerment. The legacy mechanism explains why there is low mobility in the CEO market, even though firms demand general CEO skills. The empowerment mechanism explains why CEOs are willing to sacrifice significant pecuniary income to manage high equity firms. The overall conclusion is that job amenities matter in the market for CEOs.
Subjects: 
multidimensional matching
observed transfers
structural estimation
value of job amenities
taxation
CEO compensation
CEO performance
JEL: 
G30
M12
C78
C35
D22
D31
J3
Document Type: 
Working Paper

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