Pay cuts for the boss: Executive compensation in the 1940s

Carola Frydman*, Raven Molloy

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

17 Scopus citations


Executive pay fell during the 1940s, marking the last notable decrease in the past 70 years. We study this decline using a new panel data set on the remuneration of top executives in 246 firms. Government regulation-including explicit salary restrictions and taxation-had, at best, a modest effect on executive pay. By contrast, a decline in the returns to firm size and an increase in the power of labor unions contributed greatly to the reduction in executive compensation relative to other workers' earnings from 1940 to 1946. The continued decrease in relative executive pay remains largely unexplained.

Original languageEnglish (US)
Pages (from-to)225-251
Number of pages27
JournalJournal of Economic History
Issue number1
StatePublished - Mar 1 2012

ASJC Scopus subject areas

  • History
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)


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