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 journalArticlepeer-review

12 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


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