Effects of managerial labor market on executive compensation : evidence from job-hopping
We find that companies dramatically raise their incumbent executives’ pay, especially equity-based pay, after losing executives to other firms. The pay raise is larger when incumbent executives have greater employment mobility in the labor market, when companies lose senior executives, and when job-...
| Main Authors: | , , |
|---|---|
| Other Authors: | |
| Format: | Journal Article |
| Language: | English |
| Published: |
2015
|
| Subjects: | |
| Online Access: | https://hdl.handle.net/10356/79450 http://hdl.handle.net/10220/25371 |
| _version_ | 1811693552259825664 |
|---|---|
| author | Gao, Huasheng Luo, Juan Tang, Tilan |
| author2 | Nanyang Business School |
| author_facet | Nanyang Business School Gao, Huasheng Luo, Juan Tang, Tilan |
| author_sort | Gao, Huasheng |
| collection | NTU |
| description | We find that companies dramatically raise their incumbent executives’ pay, especially equity-based pay, after losing executives to other firms. The pay raise is larger when incumbent executives have greater employment mobility in the labor market, when companies lose senior executives, and when job-hopping executives receive favorable job offers in their new firms. A company׳s subsequent pay raise to incumbent executives after losing an executive diminishes its deficiency in executive compensation relative to its industry peer firms, and is effective at retaining its incumbent executives. Overall, our evidence suggests that executive job-hopping activity has significant effects on firms’ compensation policies. |
| first_indexed | 2024-10-01T06:53:29Z |
| format | Journal Article |
| id | ntu-10356/79450 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T06:53:29Z |
| publishDate | 2015 |
| record_format | dspace |
| spelling | ntu-10356/794502023-05-19T06:44:41Z Effects of managerial labor market on executive compensation : evidence from job-hopping Gao, Huasheng Luo, Juan Tang, Tilan Nanyang Business School DRNTU::Business::Accounting::Income Managerial Labor Market Executive Compensation We find that companies dramatically raise their incumbent executives’ pay, especially equity-based pay, after losing executives to other firms. The pay raise is larger when incumbent executives have greater employment mobility in the labor market, when companies lose senior executives, and when job-hopping executives receive favorable job offers in their new firms. A company׳s subsequent pay raise to incumbent executives after losing an executive diminishes its deficiency in executive compensation relative to its industry peer firms, and is effective at retaining its incumbent executives. Overall, our evidence suggests that executive job-hopping activity has significant effects on firms’ compensation policies. Accepted version 2015-04-13T01:36:55Z 2019-12-06T13:25:39Z 2015-04-13T01:36:55Z 2019-12-06T13:25:39Z 2015 2015 Journal Article Gao, H., Luo, J., & Tang, T. (2015). Effects of managerial labor market on executive compensation : evidence from job-hopping. Journal of accounting and economics, 59(2-3), 203-220. doi:10.1016/j.jacceco.2015.02.001 0165-4101 https://hdl.handle.net/10356/79450 http://hdl.handle.net/10220/25371 10.1016/j.jacceco.2015.02.001 en Journal of accounting and economics © 2015 Elsevier B.V. This is the author created version of a work that has been peer reviewed and accepted for publication by Journal of Accounting and Economics, Elsevier B.V. It incorporates referee’s comments but changes resulting from the publishing process, such as copyediting, structural formatting, may not be reflected in this document. The published version is available at: [Article DOI: http://dx.doi.org/10.1016/j.jacceco.2015.02.001]. 18 p. application/pdf |
| spellingShingle | DRNTU::Business::Accounting::Income Managerial Labor Market Executive Compensation Gao, Huasheng Luo, Juan Tang, Tilan Effects of managerial labor market on executive compensation : evidence from job-hopping |
| title | Effects of managerial labor market on executive compensation : evidence from job-hopping |
| title_full | Effects of managerial labor market on executive compensation : evidence from job-hopping |
| title_fullStr | Effects of managerial labor market on executive compensation : evidence from job-hopping |
| title_full_unstemmed | Effects of managerial labor market on executive compensation : evidence from job-hopping |
| title_short | Effects of managerial labor market on executive compensation : evidence from job-hopping |
| title_sort | effects of managerial labor market on executive compensation evidence from job hopping |
| topic | DRNTU::Business::Accounting::Income Managerial Labor Market Executive Compensation |
| url | https://hdl.handle.net/10356/79450 http://hdl.handle.net/10220/25371 |
| work_keys_str_mv | AT gaohuasheng effectsofmanageriallabormarketonexecutivecompensationevidencefromjobhopping AT luojuan effectsofmanageriallabormarketonexecutivecompensationevidencefromjobhopping AT tangtilan effectsofmanageriallabormarketonexecutivecompensationevidencefromjobhopping |