IDEAS home Printed from https://ideas.repec.org/a/taf/rripxx/v30y2023i3p1017-1045.html
   My bibliography  Save this article

Executive compensation in Europe: realized gains from stock-based pay

Author

Listed:
  • Patricia Kotnik
  • Mustafa Erdem Sakinç

Abstract

Shareholder value ideology and the rise of executive pay are widely acknowledged but only partly explored aspects of financialization. This paper adds to the empirical evidence on the extent to which stock-based pay incentivizes and rewards corporate executives, demonstrating that CEO pay, and hence pay inequality, is substantially under-stated in Europe. It shows that the actual realized gains (that is, take-home compensation) from stock-based pay of CEOs in the largest European companies are underestimated by the use of ‘fair value’ measures, in the case of some countries dramatically. We base our work on a sample of 301 large, publicly-traded companies listed in the S&P Europe 350 index from 11 EU countries. We document that on average half of the total compensation of the European CEOs in our sample is stock-based, measured by actual realized gains, with differences among countries. Based on our work, we argue that realized gains measures of CEO pay should be the standard for assessing the incentives and rewards of senior corporate executives in Europe. We consider this to be a preliminary step to question shareholder value-based corporate strategies in Europe.

Suggested Citation

  • Patricia Kotnik & Mustafa Erdem Sakinç, 2023. "Executive compensation in Europe: realized gains from stock-based pay," Review of International Political Economy, Taylor & Francis Journals, vol. 30(3), pages 1017-1045, May.
    • Handle: RePEc:taf:rripxx:v:30:y:2023:i:3:p:1017-1045
    DOI: 10.1080/09692290.2022.2078397
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09692290.2022.2078397
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09692290.2022.2078397?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    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:taf:rripxx:v:30:y:2023:i:3:p:1017-1045. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rrip20 .

    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.