An ill wind? Terrorist attacks and CEO compensation

Yunhao Dai, P. Raghavendra Rau*, Aris Stouraitis, Weiqiang Tan

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    86 Citations (Scopus)


    Using multiple measures of attack proximity, we show that CEOs employed at firms located near terrorist attacks earn an average pay increase of 12% after the attack relative to CEOs at firms located far from attacks. CEOs at terrorist attack-proximate firms prefer cash-based compensation increases (e.g., salary and bonus) over equity-based compensation (e.g., options and stocks granted). The effect is causal and it is larger when the bargaining power of the CEO is high. Other executives and workers do not receive a terrorist attack premium.
    Original languageEnglish
    Pages (from-to)379-398
    Number of pages20
    JournalJournal of Financial Economics
    Issue number2
    Publication statusPublished - Feb 2020

    Scopus Subject Areas

    • Accounting
    • Finance
    • Economics and Econometrics
    • Strategy and Management

    User-Defined Keywords

    • CEO labor market
    • Compensation structure
    • Executive compensation
    • Nonmonetary compensation
    • Terrorist attacks


    Dive into the research topics of 'An ill wind? Terrorist attacks and CEO compensation'. Together they form a unique fingerprint.

    Cite this