TY - JOUR
T1 - An ill wind? Terrorist attacks and CEO compensation
AU - Dai, Yunhao
AU - Rau, P. Raghavendra
AU - Stouraitis, Aris
AU - Tan, Weiqiang
N1 - Funding Information:
We thank an anonymous referee, Kee-Hong Bae, Claudia Custodio, Mustafa Leeq, Christoph Loch, Ernst Maug, Sucheta Nadkarni, participants at the Asian Finance Association 2018 Annual Meeting in Tokyo, and the International Finance Symposium 2018 in Kissamos for comments on earlier drafts. Dai is grateful for financial support from the National Natural Science Foundation of China (Grant no. 71702061). Tan is grateful for research support from the Faculty Research Grant of Hong Kong Baptist University.
Publisher copyright:
© 2019 Elsevier B.V. All rights reserved.
PY - 2020/2
Y1 - 2020/2
N2 - 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.
AB - 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.
KW - CEO labor market
KW - Compensation structure
KW - Executive compensation
KW - Nonmonetary compensation
KW - Terrorist attacks
UR - http://www.scopus.com/inward/record.url?scp=85067645370&partnerID=8YFLogxK
U2 - 10.1016/j.jfineco.2019.06.005
DO - 10.1016/j.jfineco.2019.06.005
M3 - Journal article
AN - SCOPUS:85067645370
SN - 0304-405X
VL - 135
SP - 379
EP - 398
JO - Journal of Financial Economics
JF - Journal of Financial Economics
IS - 2
ER -
