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CEO compensation in EU telecom companies: Does the state design the right incentives?

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  • Cambini, Carlo
  • De Masi, Sara
  • Paci, Andrea
  • Rondi, Laura

Abstract

This paper analyzes the structure of CEO pay in European fixed telecommunication companies, focusing on the impact of state ownership. Results show that, under the (partial or total) control of the state, the level of CEO compensation is lower and pay-performance sensitivity is higher than in privately-controlled firms. This finding suggests the state provides an incentive as well as a monitoring effect. However, when the state holds the majority of the shares, the pay level is significantly affected by the CEO power, suggesting that in these firms, CEOs are more likely to be entrenched with boards and succeed in raising their pay.

Suggested Citation

  • Cambini, Carlo & De Masi, Sara & Paci, Andrea & Rondi, Laura, 2018. "CEO compensation in EU telecom companies: Does the state design the right incentives?," Telecommunications Policy, Elsevier, vol. 42(6), pages 474-488.
    • Handle: RePEc:eee:telpol:v:42:y:2018:i:6:p:474-488
    DOI: 10.1016/j.telpol.2018.03.004
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    2. Claudine Salgado & Guilherme Schneider & Cristiano M. Costa, 2022. "Does board interlock affect CEO compensation? Evidence from companies listed in the Brazilian stock exchange," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 19(4), pages 444-465, December.

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    More about this item

    Keywords

    Telecom companies; CEO compensation; State ownership; Corporate governance;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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