Executive Compensation and Labor Expenses

Using data on US public firms, I uncover a strong and positive correlation between executive compensationand labor expenses. On average, a 1% increase in the wage bill translates into a 0.3% raise in total executivepay. This association is driven by wages rather than by employment growth, is stronger for the incentive thanfor the salary component of executive compensation, and is particularly pronounced in the financial sector.

15. January 2020

Authors Stefano Colonnello

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Professor Stefano Colonnello, PhD
Professor Stefano Colonnello, PhD
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