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A scaling perspective on the distribution of executive compensation

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  • Sitthiyot, Thitithep
  • Budsaratragoon, Pornanong
  • Holasut, Kanyarat

Abstract

We investigate scale invariance or self-similarity in the distribution of average executive compensation defined as total executive compensation for each company divided by the number of executives in that company. Using annual data on companies listed in the Stock Exchange of Thailand between 2002 and 2015, the average executive compensation is categorized into three groups according to time period, industry type, and company size. The results from estimating the Lorenz curve and the Kolmogorov–Smirnov test indicate that the distributions of average executive compensation are statistically scale invariance or self-similar across time period, industry type, and company size with p-values greater than 0.01 in all cases.

Suggested Citation

  • Sitthiyot, Thitithep & Budsaratragoon, Pornanong & Holasut, Kanyarat, 2020. "A scaling perspective on the distribution of executive compensation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 543(C).
    • Handle: RePEc:eee:phsmap:v:543:y:2020:i:c:s0378437119319818
    DOI: 10.1016/j.physa.2019.123556
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    References listed on IDEAS

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    2. Jagielski, Maciej & Czyżewski, Kordian & Kutner, Ryszard & Stanley, H. Eugene, 2017. "Income and wealth distribution of the richest Norwegian individuals: An inequality analysis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 474(C), pages 330-333.
    3. Brock, W A, 1999. "Scaling in Economics: A Reader's Guide," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 8(3), pages 409-446, September.
    4. Klass, Oren S. & Biham, Ofer & Levy, Moshe & Malcai, Ofer & Solomon, Sorin, 2006. "The Forbes 400 and the Pareto wealth distribution," Economics Letters, Elsevier, vol. 90(2), pages 290-295, February.
    5. repec:cup:cbooks:9781107013445 is not listed on IDEAS
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    Cited by:

    1. Thitithep Sitthiyot & Kanyarat Holasut, 2020. "A simple method for measuring inequality," Palgrave Communications, Palgrave Macmillan, vol. 6(1), pages 1-9, December.
    2. Thitithep Sitthiyot & Kanyarat Holasut, 2021. "A simple method for estimating the Lorenz curve," Palgrave Communications, Palgrave Macmillan, vol. 8(1), pages 1-9, December.
    3. Thitithep Sitthiyot & Kanyarat Holasut, 2024. "Quantifying fair income distribution in Thailand," Papers 2404.09629, arXiv.org.

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