The Impact of Organized Labor on CEO Debt-Like Compensation

Abstract

We examine the impact of organized labor on the debt-like components of CEO compensation. In initial findings, we demonstrate a positive association between unionization intensity with measures of debt-like compensation intensity used in the extant literature. This finding is robust to alternative measures of union-bargaining strength and empirical approaches. Consistent with the view that managers substitute cash for accrued compensation to improve their bargaining position over labor, this result is robustly driven by the deferred component of debt-like compensation. Our results collectively suggest that unions play an important role in the use of deferred compensation.