Here is my working papers.
The real costs of CEO compensation - the effect of behindness aversion of employees view pdf
Do employees who compare themselves to the CEO matter for executive compensation? Using German establishment-level wage data, we show that employee wages are increasing in CEO compensation. When CEO compensation increases 1%, the median employee’s wage increases by about 0.04%. Higher CEO compensation also increases the probability for the existence of employee stock ownership plans. We use a difference-indifference setting to provide causal evidence for the relationship. Our findings suggest that behindness aversion of employees is an important driver of wages and increases the costs of executive compensation significantly. We structurally estimate a principal-agent model with two agents (CEO, representative employee) to identify the behindness aversion parameters.
- Joint work with Ingolf Dittmann and Christoph Schneider.
- Presented at the Erasmus Finance brown bag seminar series.