Volume 25, Number 1 (Winter) 1990
Kostiuk, Peter F. 1990. "Firm Size and Executive Compensation." Journal of Human Resources 25(1):90-105.
Using several data sets, the relationship between executive income and firm size is shown to be relatively stable over time and in different countries. The elasticity of executive earnings to firm size is about the same today as it was in the 1930s, with evidence of a decline in the earnings of top executives, controlling for firm size. In addition to the effects of size and other firm and industry characteristics, there are returns to age and experience. There is also substantial variability in the level of compensation among firms of comparable size, indicating that there may be impediments to mobility.
The author is an economist at the Center for Naval Analyses. He is grateful to Nadeem Haque, Sam Peltzman, Gary Becker, two anonymous referees, and especially Sherwin Rosen for many useful comments and suggestions. he also wishes to thank participants in the Workshop in Applications of Economics at the University of Chicago for many helpful comments and criticisms. he takes responsibility for any remaining errors. This research was partially funded by the National Science Foundation, with computing resources provided by the Center for Naval Analyses.
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