סמינר במימון חשבונאות

Speaker:            Prof. Ran Duchin, University of Washington

Abstract:

Using hand-collected data on divisional managers at S&P 1500 firms, we study how changes in one divisional manager’s compensation affect the compensation of other divisional managers inside the same conglomerate. An increase in a manager’s pay driven by an industry shock generates large positive intrafirm spillovers on the pay of other divisional managers. These spillovers operate only within firm boundaries and are non-existent for the same industry pairs in standalone firms. The intra-firm spillovers are stronger when managers share social networks, suggesting that informal interactions facilitate peer effects. The intra-firm convergence in executive pay is associated with weaker governance and lower firm value. Overall, we provide evidence on corporate socialism in executive pay.

The articles will be available for download from the Finance-Accounting seminar website:

http://en-recanati.tau.ac.il/Finance-Accounting-Seminars2015a