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The Public Perception and Normative Valuation of Executive Compensation: An International Comparison

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  • Kuhn, Andreas

    (Swiss Federal Institute for Vocational Education and Training)

Abstract

This paper describes individuals' perceptions and normative valuations of executive compensation using comparable survey data for fifteen OECD member countries. An overwhelming majority of individuals (more than 90%) believes that top executives earn more than they actually deserve. However, there is also substantial variation in the actual and ethical levels of executive compensation, both within and across countries. The empirical analysis further shows that subjective estimates of executive pay are associated with objective measures of inequality and redistribution, and that individuals' perceptions and normative valuations of executive compensation are associated with their more general political preferences.

Suggested Citation

  • Kuhn, Andreas, 2010. "The Public Perception and Normative Valuation of Executive Compensation: An International Comparison," IZA Discussion Papers 5319, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp5319
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    References listed on IDEAS

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    1. Sophia Rabe-Hesketh & Anders Skrondal, 2012. "Multilevel and Longitudinal Modeling Using Stata, 3rd Edition," Stata Press books, StataCorp LP, edition 3, number mimus2, March.
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    More about this item

    Keywords

    political preferences; subjective wage estimates; executive compensation;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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