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Former CEO director and executive-employee pay gap

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  • Ye, Miaomiao
  • Li, Mengzhe
  • Zeng, Qiannan

Abstract

This study investigates the influence of former CEO directors on the executive-employee pay gap. We find that former CEO directors significantly increase the executive-employee pay gap. This effect is more pronounced in non-state-owned companies, companies in less competitive product markets, weaker corporate supervision environments, and with lower shareholding ratios of majority shareholders. Further evidence shows that only when former CEOs serve as the chairman of the board can they have a direct influence on the executive-employee pay gap; the former CEO director focuses only on executive compensation but not on employee compensation. Finally, we find that the pay gap occasioned by the former CEO director has a negative impact on the future accounting performance of the company.

Suggested Citation

  • Ye, Miaomiao & Li, Mengzhe & Zeng, Qiannan, 2022. "Former CEO director and executive-employee pay gap," Pacific-Basin Finance Journal, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:pacfin:v:76:y:2022:i:c:s0927538x22001585
    DOI: 10.1016/j.pacfin.2022.101863
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