The Market for CEOs: Building Legacy and Feeling Empowered Matter

Arbeitspapier

We develop a two-sided multidimensional matching model of the market for CEOs that allows for both pecuniary and non-pecuniary (amenity) compensation. The model is estimated by maximum likelihood estimation using matched CEO-firm data from Denmark. We show that CEOs have preferences for building legacy and gaining empowerment. The legacy mechanism explains why there is low mobility in the CEO market, even though firms demand general CEO skills. The empowerment mechanism explains why CEOs are willing to sacrifice significant pecuniary income to manage high equity firms. The overall conclusion is that job amenities matter in the market for CEOs.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 14803

Classification and Topics

• Classification: Wirtschaft ; Corporate Finance and Governance: General ; Personnel Management; Executives; Executive Compensation ; Bargaining Theory; Matching Theory ; Multiple or Simultaneous Equation Models: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions ; Firm Behavior: Empirical Analysis ; Personal Income, Wealth, and Their Distributions
• Subject: multidimensional matching ; observed transfers ; structural estimation ; value of job amenities ; taxation ; CEO compensation ; CEO performance

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dupuy, Arnaud ; Kennes, John ; Lyng, Ran Sun
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/250464
• Last update: 10.03.2025, 11:45 AM CET