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CEO Perquisites in Canada, 1971-2008: Certainly Not Pure Managerial Excess

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Listed:
  • Patrice Gelinas
  • Lisa Baillargeon

Abstract

This paper explores Canadian market data on CEO perquisites gathered by a large consulting firm over the period from 1971 to 2008. Perquisites are one of the least documented total compensation components in the academic literature on executive pay. Scant existing literature may be due to the relatively recent and limited corporate disclosures on CEO perquisites, as well as to the comparatively modest monetary value of perquisites relative to other total CEO compensation components. Meanwhile, CEO perquisites regularly capture the public’s imagination in the media because of some perceived excesses, such as immoderate personal use of corporate aircraft (see Rajan & Wulf, 2006). We document a significant evolution in CEO perquisites practices over the period. Consistent with a nascent body of literature, this paper supports empirically hypotheses arguing that CEO perquisites do not uniquely occur as a result of an agency problem, the main theoretical explanation for their existence as of yet, but that they can also serve a legitimate, value-creating, business purpose for the benefit of shareholders.

Suggested Citation

  • Patrice Gelinas & Lisa Baillargeon, 2018. "CEO Perquisites in Canada, 1971-2008: Certainly Not Pure Managerial Excess," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(5), pages 105-105, March.
    • Handle: RePEc:ibn:ijbmjn:v:13:y:2018:i:5:p:105
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    References listed on IDEAS

    as
    1. Xianming Zhou, 2000. "CEO pay, firm size, and corporate performance: evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 33(1), pages 213-251, February.
    2. Xianming Zhou, 2000. "CEO pay, firm size, and corporate performance: evidence from Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(1), pages 213-251, February.
    3. Jane A. Craighead & Michel L. Magnan & Linda Thorne, 2004. "The Impact of Mandated Disclosure on Performance†Based CEO Compensation," Contemporary Accounting Research, John Wiley & Sons, vol. 21(2), pages 369-398, June.
    4. David Morand & Kimberly Merriman, 2012. "“Equality Theory” as a Counterbalance to Equity Theory in Human Resource Management," Journal of Business Ethics, Springer, vol. 111(1), pages 133-144, November.
    5. Yermack, David, 2006. "Flights of fancy: Corporate jets, CEO perquisites, and inferior shareholder returns," Journal of Financial Economics, Elsevier, vol. 80(1), pages 211-242, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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