TY - JOUR
T1 - Making Sense of One Dollar CEO Salaries
AU - Hamm, Sophia J.W.
AU - Jung, Michael J.
AU - Wang, Clare
N1 - Publisher Copyright:
© 2015 The Canadian Academic Accounting Association.
PY - 2015/9/1
Y1 - 2015/9/1
N2 - We examine the determinants and outcomes of Chief Executive Officers (CEOs) accepting a $1 salary, a compensation practice that occurs relatively frequently in high-profile firms and is debated by regulators, investors, and the media. Using a hand-collected sample of 93 CEOs from 91 firms between 1993 and 2011, we examine the triggers preceding the $1 salary decision, the factors associated with the decision, subsequent stock returns, and the outcomes for the CEOs. Our evidence is consistent with two explanations for the phenomenon: (i) it is a gesture of sacrifice by CEOs of firms in crisis, and (ii) it is a signal of better future performance by CEOs of growing firms. Our analyses highlight the two different circumstances and shed light on an interesting debate that has thus far been supported only by anecdotal evidence.
AB - We examine the determinants and outcomes of Chief Executive Officers (CEOs) accepting a $1 salary, a compensation practice that occurs relatively frequently in high-profile firms and is debated by regulators, investors, and the media. Using a hand-collected sample of 93 CEOs from 91 firms between 1993 and 2011, we examine the triggers preceding the $1 salary decision, the factors associated with the decision, subsequent stock returns, and the outcomes for the CEOs. Our evidence is consistent with two explanations for the phenomenon: (i) it is a gesture of sacrifice by CEOs of firms in crisis, and (ii) it is a signal of better future performance by CEOs of growing firms. Our analyses highlight the two different circumstances and shed light on an interesting debate that has thus far been supported only by anecdotal evidence.
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U2 - 10.1111/1911-3846.12136
DO - 10.1111/1911-3846.12136
M3 - Article
AN - SCOPUS:84941167490
SN - 0823-9150
VL - 32
SP - 941
EP - 972
JO - Contemporary Accounting Research
JF - Contemporary Accounting Research
IS - 3
ER -