The Public Perception and Normative Valuation of Executive Compensation: An International Comparison

32 Pages Posted: 22 Nov 2010

See all articles by Andreas Kuhn

Andreas Kuhn

University of Zurich; IZA Institute of Labor Economics

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Abstract

This paper describes individuals' perceptions and normative valuations of executive compensation using comparable survey data for fifteen OECD member countries. An overwhelming majority of individuals (more than 90%) believes that top executives earn more than they actually deserve. However, there is also substantial variation in the actual and ethical levels of executive compensation, both within and across countries. The empirical analysis further shows that subjective estimates of executive pay are associated with objective measures of inequality and redistribution, and that individuals' perceptions and normative valuations of executive compensation are associated with their more general political preferences.

Keywords: executive compensation, subjective wage estimates, political preferences

JEL Classification: D31, D63, J31

Suggested Citation

Kuhn, Andreas, The Public Perception and Normative Valuation of Executive Compensation: An International Comparison. IZA Discussion Paper No. 5319, Available at SSRN: https://ssrn.com/abstract=1712626

Andreas Kuhn (Contact Author)

University of Zurich ( email )

Bluemlisalpstrasse 10
Zurich, 8006
Switzerland

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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