CEO Pay and the Market for CEOs

Falato, Antonio; Milbourn, Todd; Li, Dan
July 2012
Working Papers -- U.S. Federal Reserve Board's Finance & Economi;2012, p1
Working Paper
The article focuses on the role of the productive abilities and talent of chief executive officers (CEO) in determining the salaries of CEOs in the CEO labor market. It is stated that if observed credentials provide valuable signals of the productive abilities of CEOs, then pay packages should reward credentials. There are three such measures of credentials based on CEO's resume: reputation in the industry, labor market status, and education.


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