There is now intense debate about how the pay levels of top executives compare with the compensation given to rank-and-file employees. But, while such comparisons can tell us much about the dynamics of inequality, the distribution of pay among top executives also deserves close attention, because it may very well point to serious corporate governance problems.
CAMBRIDGE – There is now intense debate about how the pay levels of top executives compare with the compensation given to rank-and-file employees. But, while such comparisons are important, the distribution of pay among top executives also deserves close attention.
In our recent research, we studied the distribution of pay among top executives in publicly traded companies in the United States. Such firms must disclose publicly the compensation packages of their five highest-paid executives. Our analysis focused on the CEO “pay slice” – that is, the CEO’s share of the aggregate compensation such firms award to their top five executives.
We found that the pay slice of CEOs has been increasing over time. Not only has compensation of the top five executives been increasing, but CEOs have been capturing an increasing proportion of it. The average CEO’s pay slice is about 35%, so that the CEO typically earns more than twice the average pay received by the other top four executives. Moreover, we found that the CEO’s pay slice is related to many aspects of firms’ performance and behavior.
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By declining to include funding for Ukraine as part of the recent deal to avert a government shutdown, the US Congress sent a signal of encouragement to Russian President Vladimir Putin. That makes tightening the price cap on Russian oil exports all the more important.
propose three steps to prevent the rise in world prices from benefiting the Kremlin's war effort.
While China was an early mover in regulating generative AI, it is also highly supportive of the technology and the companies developing it. Chinese AI firms might even have a competitive advantage over their American and European counterparts, which are facing strong regulatory headwinds and proliferating legal challenges.
thinks the rules governing generative artificial intelligence give domestic firms a competitive advantage.
CAMBRIDGE – There is now intense debate about how the pay levels of top executives compare with the compensation given to rank-and-file employees. But, while such comparisons are important, the distribution of pay among top executives also deserves close attention.
In our recent research, we studied the distribution of pay among top executives in publicly traded companies in the United States. Such firms must disclose publicly the compensation packages of their five highest-paid executives. Our analysis focused on the CEO “pay slice” – that is, the CEO’s share of the aggregate compensation such firms award to their top five executives.
We found that the pay slice of CEOs has been increasing over time. Not only has compensation of the top five executives been increasing, but CEOs have been capturing an increasing proportion of it. The average CEO’s pay slice is about 35%, so that the CEO typically earns more than twice the average pay received by the other top four executives. Moreover, we found that the CEO’s pay slice is related to many aspects of firms’ performance and behavior.
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