Asymmetric benchmarking of pay in firms

Bill Francis, Iftekhar Hasan, Kose John and Zenu Sharma

Journal of Corporate Finance, 2013, vol. 23, issue C, 39-53

Abstract: This paper examines whether asymmetric benchmarking of pay exists for vice presidents (VPs). Using ExecuComp data for 1992–2007, we find that companies reward VPs for good luck but do not penalize them for bad luck. However, asymmetric benchmarking of VP pay is mitigated by governance, CEO power, gender, and industry factors. The presence of asymmetric benchmarking of pay could suggest that managers are involved in skimming, or it could mean that firms insulate managers from poor firm performance to prevent them from accessing outside opportunities. We find that unlike CEOs, asymmetric benchmarking of pay for VPs is not consistent with the skimming hypothesis.

Keywords: CEO compensation; VP compensation; Benchmarking; Pay for luck (search for similar items in EconPapers)
JEL-codes: D8 G3 J3 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:23:y:2013:i:c:p:39-53

DOI: 10.1016/j.jcorpfin.2013.07.004

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