CEO Compensation: Evidence From the Field

CEO Compensation: Evidence From the Field

Alex Edmans, Tom Gosling, Dirk Jenter

Series number :

Serial Number: 

Date posted :

July 08 2021

Last revised :

October 28 2023
SSRN Share


  • executive compensation • 
  • contract theory • 
  • CEO Incentives • 
  • Fairness • 
  • Survey

We survey directors and investors on the objectives, constraints, and determinants of CEO pay. We find that directors face constraints beyond participation and incentives, and that pay matters not to finance consumption but to address CEOs’ fairness concerns. 67% of directors would sacrifice shareholder value to avoid controversy, leading to lower levels and one-size-fits-all structures.

Shareholders are the main source of constraints, suggesting directors and investors disagree on how to maximize value. Intrinsic motivation and reputation are seen as stronger motivators than incentive pay. Even with strong portfolio incentives, flow pay responds to performance to fairly recognize the CEO’s contribution.

Published in

Published in: 
Journal of Financial Economics (JFE), Forthcoming


Real name:
Tom Gosling
London Business School and ECGI
Real name:
Research Member
The London School of Economics and Political Science