Executive compensation: A new view from a long-term perspective, 1936-2005

Carola Frydman*, Raven E. Saks

*Corresponding author for this work

Research output: Contribution to journalArticle

200 Scopus citations


We analyze the long-run trends in executive compensation using a new dataset of top officers of large firms from 1936 to 2005. The median real value of compensation was remarkably flat from the late 1940s to the 1970s, revealing a weak relationship between pay and aggregate firm growth. By contrast, this correlation was much stronger in the past thirty years. This historical perspective also suggests that compensation arrangements have often helped to align managerial incentives with those of shareholders because executive wealth was sensitive to firm performance for most of our sample. These new facts pose a challenge to several common explanations for the rise in executive pay since the 1980s.

Original languageEnglish (US)
Pages (from-to)2099-2138
Number of pages40
JournalReview of Financial Studies
Issue number5
StatePublished - May 1 2010

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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