Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81419
Authors: 
Oxelheim, Lars
Wihlborg, Clas
Zhang, Jianhoa
Year of Publication: 
2008
Series/Report no.: 
IFN Working Paper 746
Abstract: 
Macroeconomic fluctuations affect corporations’ performance through demand and cost conditions. Incentive effects of performance-based compensation schemes for management may be weakened or biased by macroeconomic influences if management is unable to forecast macroeconomic fluctuations or unable to adjust operations in response to changes in macroeconomic conditions. In this paper we analyze the impact of macroeconomic, industry and firm-specific factors on salaries and bonus of CEOs in 131 Swedish corporations during the period 2001–2006. A distinction is made between anticipated and unanticipated macroeconomic fluctuations. The macroeconomic influences on performance and compensation can be expected to vary from firm to firm in terms of magnitude of effects, as well as in terms of relevant macroeconomic variables. The estimates obtained in this paper refer to the average impact across the sample of firms. We find that the average Swedish CEOs’ compensation is explained to a substantial extent by macroeconomic factors; less so by unanticipated factors alone.
Subjects: 
Executive Compensation
Macroeconomic Factors
Cash Compensation
JEL: 
L14
L16
M14
M21
M52
Document Type: 
Working Paper

Files in This Item:
File
Size
213.16 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.