Cuñat, Vicente 
ORCID: 0000-0001-7504-2801 and Guadalupe, Maria
(2009)
Executive compensation and competition in the banking and financial sectors.
Journal of Banking and Finance, 33 (3).
pp. 495-504.
ISSN 0378-4266
Abstract
This paper studies the effect of product market competition on the compensation packages that firms offer to their executives. We use a panel of US executives in the 1990s and exploit two deregulation episodes in the banking and financial sectors as quasi-natural experiments. We provide difference-in-differences estimates of their effect on (1) total pay, (2) estimated fixed pay and performance-pay sensitivities, and (3) the sensitivity of stock option grants. Our results indicate that the deregulations substantially changed the level and structure of compensation: the variable components of pay increased along with performance-pay sensitivities and, at the same time, the fixed component of pay fell. The overall effect on total pay was small.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.elsevier.com/wps/find/journaldescriptio... |
| Additional Information: | © 2008 Elsevier B.V. |
| Divisions: | Finance Financial Markets Group |
| Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance |
| Date Deposited: | 08 Feb 2011 09:55 |
| Last Modified: | 11 Dec 2024 23:34 |
| URI: | http://eprints.lse.ac.uk/id/eprint/32244 |
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