Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/87444
Authors: 
Peters, Florian S.
Wagner, Alexander F.
Year of Publication: 
2012
Series/Report no.: 
Tinbergen Institute Discussion Paper 12-021/2/DSF30
Abstract: 
We establish that CEOs of companies experiencing volatile industry conditions are more likely tobe dismissed. At the same time, industry risk is, controlling for various other factors, unlikelyto be directly associated with CEO compensation other than through dismissal risk. Using thisidentification strategy, we document that CEO turnover risk is significantly positively associatedwith compensation. This finding is important because job-risk compensating wage differentials arisenaturally in competitive labor markets. By contrast, the evidence rejects a simple entrenchmentmodel according to which powerful CEOs have lower job risk and at the same time secure highercompensation.
Subjects: 
CEO turnover
CEO Compensation
Corporate Governance
JEL: 
D8
G34
M52
Document Type: 
Working Paper

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