Article
The Wages of Sin: Social Norms and Executive Compensation
Journal of Legal, Ethical and Regulatory Issues
(2013)
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.
Disciplines
Publication Date
January 1, 2013
Citation Information
David A. Sauer, Gary P. Schneider and Aamer Sheikh. "The Wages of Sin: Social Norms and Executive Compensation" Journal of Legal, Ethical and Regulatory Issues Vol. 16 Iss. 1 (2013) p. 47 Available at: http://works.bepress.com/gary-schneider/9/