The Wages of Sin: Social Norms and Executive Compensation

David A. Sauer; Gary P. Schneider; Aamer Sheikh

The Wages of Sin: Social Norms and Executive Compensation

David A. Sauer, Gary P. Schneider, Aamer Sheikh

College of Business

Research output: Contribution to journal › Article › peer-review

Abstract

This paper provides preliminary evidence on the effect of social norms on CEO pay. Using a sample of sin firms and non-sin firms for the years 1992-2010, we find that CEOs of sin firms earn higher pay than CEOs of non-sin firms. In addition, the bonus and cash pay-performance sensitivities of CEOs of sin firms are higher than the bonus and cash pay-performance sensitivities of CEOs of non-sin firms when performance is measured using accounting returns. These results add to the growing literature on the effect of social norms on financial markets.

Original language	American English
Journal	Journal of Legal, Ethical and Regulatory Issues
Volume	16
State	Published - Jan 1 2013

Disciplines

Statistics and Probability
Economics

Cite this

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abstract = " This paper provides preliminary evidence on the effect of social norms on CEO pay. Using a sample of sin firms and non-sin firms for the years 1992-2010, we find that CEOs of sin firms earn higher pay than CEOs of non-sin firms. In addition, the bonus and cash pay-performance sensitivities of CEOs of sin firms are higher than the bonus and cash pay-performance sensitivities of CEOs of non-sin firms when performance is measured using accounting returns. These results add to the growing literature on the effect of social norms on financial markets. ",

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The Wages of Sin: Social Norms and Executive Compensation

Abstract

Disciplines

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