IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_2402.html
   My bibliography  Save this paper

French CEO Compensations: What is the Cost of a Mandatory Upper Limit?

Author

Listed:
  • Fabienne Llense

Abstract

In the middle of the nineties, the sharp increase in globalisation and the last privatization wave have promoted the shaping of a market for executives in France. Characteristics of this market are estimated for France and a competitive model is simulated in order to assess to what extend such a model could explain the observed CEO compensations. The size elasticity of compensation in France is equal to 0.5 and justifies a large magnitude in compensation. To moderate those compensations, a wage cap is often called for by opinion and the European left but also, more surprisingly, by representative of shareholders. The cost of this policy is evaluated in this sorting model and the lobbying of shareholders is explained.

Suggested Citation

  • Fabienne Llense, 2008. "French CEO Compensations: What is the Cost of a Mandatory Upper Limit?," CESifo Working Paper Series 2402, CESifo.
  • Handle: RePEc:ces:ceswps:_2402
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp2402.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert M. Costrell & Glenn C. Loury, 2004. "Distribution of Ability and Earnings in a Hierarchical Job Assignment Model," Journal of Political Economy, University of Chicago Press, vol. 112(6), pages 1322-1363, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thanassoulis, John, 2014. "Bank pay caps, bank risk, and macroprudential regulation," Journal of Banking & Finance, Elsevier, vol. 48(C), pages 139-151.
    2. Rui Albuquerque & Luís Cabral & José Guedes, 2019. "Incentive Pay and Systemic Risk," The Review of Financial Studies, Society for Financial Studies, vol. 32(11), pages 4304-4342.
    3. Gabaix, Xavier & Edmans, Alex, 2010. "Risk and the CEO Market: Why Do Some Large Firms Hire Highly-Paid, Low-Talent CEOs?," CEPR Discussion Papers 7836, C.E.P.R. Discussion Papers.
    4. Gersbach, Hans & Schmutzler, Armin, 2014. "Does globalization create superstars? A simple theory of managerial wages," European Economic Review, Elsevier, vol. 71(C), pages 34-51.
    5. Roberto Barontini & Stefano Bozzi, 2011. "Board compensation and ownership structure: empirical evidence for Italian listed companies," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 15(1), pages 59-89, February.
    6. Marika Karanassou & Hector Sala, 2012. "Inequality and Employment Sensitivities to the Falling Labour Share," The Economic and Social Review, Economic and Social Studies, vol. 43(3), pages 343-376.
    7. Dittmann, Ingolf & Maug, Ernst & Zhang, Dan, 2011. "Restricting CEO pay," Journal of Corporate Finance, Elsevier, vol. 17(4), pages 1200-1220, September.
    8. Carola Frydman, 2008. "Learning from the Past: Trends in Executive Compensation over the Twentieth Century," CESifo Working Paper Series 2460, CESifo.
    9. Karanassou, Marika & Sala, Hector, 2010. "The Wage-Productivity Gap Revisited: Is the Labour Share Neutral to Employment?," IZA Discussion Papers 5092, Institute of Labor Economics (IZA).
    10. John Thanassoulis, 2012. "The Case for Intervening in Bankers’ Pay," Journal of Finance, American Finance Association, vol. 67(3), pages 849-895, June.
    11. Kentaro Asai, 2016. "Is Capping Executive Bonuses Useful?," IMF Working Papers 2016/196, International Monetary Fund.
    12. Frédéric TEULON, 2014. "CEO compensation and topmanagement incentives. Internal or social problems ?," Working Papers 2014-187, Department of Research, Ipag Business School.
    13. Marika Karanassou & Hector Sala, 2010. "The Wage-Productivity Gap Revisited: Is the Labour Share Neutral to Employment?," Working Papers 668, Queen Mary University of London, School of Economics and Finance.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bruno Crépon & Muriel Dejemeppe & Marc Gurgand, 2005. "Counseling the unemployed: does it lower unemployment duration and recurrence?," Working Papers halshs-00590769, HAL.
    2. Roland G. Fryer, Jr. & Glenn Loury, 2010. "Valuing Identity," NBER Working Papers 16568, National Bureau of Economic Research, Inc.
    3. Bilancini, Ennio & Boncinelli, Leonardo, 2014. "Instrumental cardinal concerns for social status in two-sided matching with non-transferable utility," European Economic Review, Elsevier, vol. 67(C), pages 174-189.
    4. Katarína Danková & Hodaka Morita & Maroš Servátka & Le Zhang, 2022. "Fairness concerns and job assignment to positions with different surplus," Southern Economic Journal, John Wiley & Sons, vol. 88(4), pages 1490-1516, April.
    5. Heidrun C. Hoppe & Benny Moldovanu & Aner Sela, 2009. "The Theory of Assortative Matching Based on Costly Signals," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 253-281.
    6. Laurent Gobillon & Dominique Meurs & Sébastien Roux, 2015. "Estimating Gender Differences in Access to Jobs," Journal of Labor Economics, University of Chicago Press, vol. 33(2), pages 317-363.
    7. Arnaud Dupuy, 2015. "The Assignment of Workers to Tasks with Endogenous Supply of Skills," Economica, London School of Economics and Political Science, vol. 82(325), pages 24-45, January.
    8. Ferrall, Christopher & Salvanes, Kjell G. & Sørensen, Erik Ø., 2009. "Wages and Seniority When Coworkers Matter: Estimating a Joint Production Economy Using Norwegian Administrative Data," IZA Discussion Papers 4130, Institute of Labor Economics (IZA).
    9. Ed Hopkins & Tatiana Kornienko, 2010. "Which Inequality? The Inequality of Endowments versus the Inequality of Rewards," American Economic Journal: Microeconomics, American Economic Association, vol. 2(3), pages 106-137, August.
    10. Ed Hopkins, 2012. "Job Market Signaling Of Relative Position, Or Becker Married To Spence," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 290-322, April.
    11. Bidner, Chris, 2010. "Pre-match investment with frictions," Games and Economic Behavior, Elsevier, vol. 68(1), pages 23-34, January.
    12. Delfgaauw, Josse & Dur, Robert, 2010. "Managerial talent, motivation, and self-selection into public management," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 654-660, October.
    13. Laurent Gobillon & Dominique Meurs & Sébastien Roux, 2009. "Estimating gender differences in access to jobs: females trapped at the bottom of the ladder," PSE Working Papers halshs-00575011, HAL.
    14. BURZYNSKI Michal & GOLA Pawel, 2019. "Mexican Migration to the United States: Selection, Assignment, and Welfare," LISER Working Paper Series 2019-10, Luxembourg Institute of Socio-Economic Research (LISER).
    15. Schultheiss, Tobias & Pfister, Curdin & Gnehm, Ann-Sophie & Backes-Gellner, Uschi, 2023. "Education expansion and high-skill job opportunities for workers: Does a rising tide lift all boats?," Labour Economics, Elsevier, vol. 82(C).
    16. Katsuya Takii, 2007. "The Persistence of Differences in Productivity, Wages, Skill Mixes and Profits Between Firms," Discussion Papers in Economics and Business 07-10, Osaka University, Graduate School of Economics.
    17. Schwager, Robert, 2012. "Grade inflation, social background, and labour market matching," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 56-66.
    18. Bas Klaauw & António Dias da Silva, 2011. "Wage dynamics and promotions inside and between firms," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1513-1548, October.
    19. Arnaud Dupuy, 2008. "The Assignment of Workers to Tasks, Wage Distribution, and Technical Change: A Critical Review," Journal of Income Distribution, Ad libros publications inc., vol. 17(3-4), pages 12-36, September.
    20. Anderson, Ronald C. & Reeb, David M. & Zhang, Yuzhao & Zhao, Wanli, 2013. "The efficacy of regulatory intervention: Evidence from the distribution of informed option trading," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4337-4352.

    More about this item

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D41 - Microeconomics - - Market Structure, Pricing, and Design - - - Perfect Competition
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_2402. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.