Generalists versus specialists: Lifetime work experience and chief executive officer pay

Custódio, Cláudia; Ferreira, Miguel A.; Matos, Pedro

doi:10.1016/j.jfineco.2013.01.001

Cited by 604 publications

(555 citation statements)

References 49 publications

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“…Outside blockholders, who can potentially monitor the CEO (see Edmans (2014) and Edmans and Holderness (2017) for surveys), are associated with compensation practices that seemingly favor shareholders. CEO pay is lower in the presence of an outside blockholder who owns a stake of at least 5% (Core, Holthausen, and Larcker, 1999) or a stake larger than the CEO's (Cyert, Kang, and Kumar, 2002). The fraction of equity compensation in total pay decreases with the total percentage stake held by outside blockholders, which suggests that blockholders and incentive pay are substitute governance mechanisms (Mehran, 1995).…”

Section: Boardsmentioning

confidence: 99%

“…Second, CEOs almost never move directly between …rms. Cziraki and Jenter (2017) show that fewer than 3% of new CEOs in S&P 500 …rms are recruited directly from CEO positions in other …rms, indicating that even worse frictions hinder the mobility of incumbent CEOs. Third, Jenter, Matveyev, and Roth (2017) show that stock prices react positively to deaths of old and longtenured CEOs, which suggests that these CEO-…rm matches are not optimal.…”

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confidence: 99%

“…Over the same period, the ratio of new CEOs appointed from outside the …rm has risen sharply, top executives have become more mobile across sectors, their business experiences have become more diverse, and the fraction of CEOs with an MBA has risen Zábojník, 2004, 2007;Frydman, 2017). In the largest 500 U.S. …rms, external hires as a percentage of all new CEO appointments increased from 15% in the 1970s to 27% during the 1990s (Murphy and Zábojník, 2007) and to 32% during the 2000s (Cziraki and Jenter, 2017).…”

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confidence: 99%

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Executive Compensation: A Survey of Theory and Evidence

Edmans¹,

Gabaix²,

Jenter³

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper reviews the theoretical and empirical literature on executive compensation. We start by presenting data on the level of CEO and other top executive pay over time and across firms, the changing composition of pay; and the strength of executive incentives. We compare pay in U.S. public firms to private and non-U.S. firms. We then critically analyze three non-exclusive explanations for what drives executive pay -shareholder value maximization by boards, rent extraction by executives, and institutional factors such as regulation, taxation, and accounting policy. We confront each hypothesis with the evidence. While shareholder value maximization is consistent with many practices that initially seem inefficient, no single explanation can account for all facts and historical trends; we highlight major gaps for future research. We discuss evidence on the effects of executive pay, highlighting recent identification strategies, and suggest policy implications grounded in theoretical and empirical research. Our survey has two main goals. First, we aim to tightly link the theoretical literature to the empirical evidence, and combine the insights contributed by all three views on the drivers of pay. Second, we aim to provide a user-friendly guide to executive compensation, presenting shareholder value theories using a simple unifying model, and discussing the challenges and methodological issues with empirical research. JEL-Codes: D310, D860, G340, M120. Terms of use: Documents in

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Section: Boardsmentioning

confidence: 99%

mentioning

confidence: 99%

mentioning

confidence: 99%

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Executive Compensation: A Survey of Theory and Evidence

Edmans¹,

Gabaix²,

Jenter³

2017

SSRN Journal

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“…Moreover, generalists have the ability to make connections across multiple disciplines, leveraging analogies from other fields to arrive at inferences about common mechanisms. Generalists can also work with more readily and easily with cross-functional teams of researchers drawn from multiple specializations, an ability reflected in the significant value assigned to generalist CEOs compared with CEOs with experience in only a single field or industry [48]. Unlike business and industry, the sciences and academia generally have been slow to recognize and reward the potential value generalists bring to research-a tendency tools like Google Scholar can help counter.…”

Section: How Might Google Scholar Change the Landscape Of Research?mentioning

confidence: 99%

Top-Down Research, Generalists, and Google Scholar: Does Google Scholar Facilitate Breakthrough Research?

Douglas¹

2016

OALib

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Researchers long ago demonstrated that top-down, inference-based approaches to research have comfortably co-existed with more traditional bottom-up, hypotheses-driven research. Yet most faculty omit any mention of top-down approaches in direct instruction or training of students, despite these approaches being both relatively common, occasionally necessary, and considerably more efficient than traditional bottom-up research. The growing sophistication of search engine algorithms, like those used by Google Scholar, makes possible highly efficient, inter-disciplinary top-down research. This article explores both the existence and operation of top-down approaches to research in the sciences and the ways in which Google Scholar could work with top-down research strategies to transform collaboration and inter-disciplinary research, particularly in the sciences.

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“…Although the prior academic literature emphasized the "bright side" view of general managerial skills, Mishra attends to its "dark side." CEOs' lifetime work experience was operationalized as a gestalt construct comprising five factors: number of positions held, number of firms worked for, positions held in the past, number of industries worked in, and prior work experience in multidivisional firms (see Custodio, Ferreira, & Matos, 2013). When the index value for a particular firm for a particular year was greater than the annual median, it was classified as a generalist CEO firm-year.…”

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confidence: 99%