Author:
Francis Bill B.,Hasan Iftekhar,John Kose,Waisman Maya
Abstract
We examine the relation between the agglomeration of firms around big cities and
chief executive officer (CEO) compensation. We find a positive relation among the
metropolitan size of a firm’s headquarters, the total and equity portion
of its CEO’s pay, and the quality of CEO educational attainment. We also
find that CEOs gradually increase their human capital in major metropolitan areas and
are rewarded for this upon relocation to smaller cities. Taken together, the results
suggest that urban agglomeration reflects local network spillovers and faster
learning of skilled individuals, for which firms are willing to pay a premium and
which are therefore important factors in CEO compensation.
Publisher
Cambridge University Press (CUP)
Subject
Economics and Econometrics,Finance,Accounting
Cited by
65 articles.
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