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|Title:||Determinants of CEO compensation: generalist - specialist versus insider - outsider attributes|
|Citation:||Journal of Corporate Finance, 2016; 39:53-77|
|Paul Brockman, Hye Seung (Grace) Lee, Jesus M.Salas|
|Abstract:||We examine the distinct effects of generalist–specialist versus insider–outsider attributes on Chief Executive Officer (CEO) compensation patterns. Our cross-sectional results show that each attribute has a significant impact on both the level and structure of CEO compensation. CEOs with a high generalist–outsider combination receive the highest total compensation, followed by generalist–insiders, specialist–outsiders, and finally specialist–insiders. Our time-series results show that the generalist–specialist effect remains constant through time while the insider–outsider effect diminishes over time. These findings suggest that the generalist premium is the result of a fundamental shift in the need for generalist skills to manage increasingly-complex enterprises. In contrast, the outsider premium is more likely caused by a temporary increase in bargaining power during contract negotiations. Overall, our study disentangles generalist–specialist attributes from insider–outsider attributes and then identifies the specific channels through which each attribute affects executive compensation.|
|Keywords:||Executive compensation; CEO insiderness; generalist skills|
|Rights:||© 2016 Elsevier B.V. All rights reserved.|
|Appears in Collections:||Economics publications|
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