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Job Amenities in the Market for CEOs

Author

Listed:
  • Arnaud Dupuy

    (Department of Economics and Business Economics, University of Luxembourg)

  • John Kennes

    (Department of Economics and Business Economics, Aarhus University)

  • Ran Sun Lyng

    (Tampere University)

Abstract

We use a two-sided multidimensional matching model with imperfect transferable utility to estimate how CEOs/firms trade off preferred firm/CEO qualities against salary. These preferences are identifiable with data on CEO pecuniary compensation and assignment. We estimate the model with high-quality Danish data through maximum likelihood, accounting for CEO and firm fixed effects. The estimates reveal that CEOs have strong preferences for non-monetary job amenities that account for several puzzling features of the market for CEOs. The central role of CEO job preferences is also illustrated by several counterfactual experiments.

Suggested Citation

  • Arnaud Dupuy & John Kennes & Ran Sun Lyng, 2023. "Job Amenities in the Market for CEOs," Economics Working Papers 2023-08, Department of Economics and Business Economics, Aarhus University.
    • Handle: RePEc:aah:aarhec:2023-08
    as

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    More about this item

    Keywords

    Job amenities; CEO compensation; Assignment Models; CEO-firm matching; Multidimensional matching;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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