Are Energy Executives Rewarded For Luck? / Lucas W. Davis, Catherine Hausman.

Format:

Book

Author/Creator:

Davis, Lucas W.

Contributor:

National Bureau of Economic Research.

Hausman, Catherine.

Series:

Working Paper Series (National Bureau of Economic Research) no. w25391.

NBER working paper series no. w25391

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

In this paper, we examine executive compensation data from 78 major U.S. oil and gas companies over a 24-year period. Perhaps in no other industry are the fortunes of so many executives so dependent on a single global commodity price. We find that a 10% increase in oil prices is associated with a 2% increase in executive compensation. This oil price effect holds for both CEOs and non-CEOs and separately for several different individual components of compensation, including bonuses. We find that the oil price effect is larger in companies with more insiders on the board, and asymmetric, with executive compensation rising with increasing oil prices more than it falls with decreasing oil prices. We then discuss potential mechanisms drawn from the broader existing literature on executive compensation.

Notes:

Print version record

December 2018.