The market for CEOs: building legacy and feeling empowered matter

Arnaud Dupuy, John Kennes, Ran Sun Lyng

We develop a two-sided multidimensional matching model of the market for CEOs that allows for both pecuniary and non-pecuniary (amenity) compensation. The model is estimated by maximum likelihood estimation using matched CEO-firm data from Denmark. We show that CEOs have preferences for building legacy and gaining empowerment. The legacy mechanism explains why there is low mobility in the CEO market, even though firms demand general CEO skills. The empowerment mechanism explains why CEOs are willing to sacrifice significant pecuniary income to manage high equity firms. The overall conclusion is that job amenities matter in the market for CEOs.

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Year of publication:	October 2021
Authors:	Dupuy, Arnaud ; Kennes, John ; Lyng, Ran Sun
Publisher:	Bonn, Germany : IZA - Institute of Labor Economics
Subject:	multidimensional matching \| observed transfers \| structural estimation \| value of job amenities \| taxation \| CEO compensation \| CEO performance \| Führungskräfte \| Managers \| Managervergütung \| Executive compensation \| Qualifikation \| Occupational qualification \| Unternehmenserfolg \| Firm performance \| Lohn \| Wages \| Matching \| Schätzung \| Estimation

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Extent:	1 Online-Ressource (circa 55 Seiten) Illustrationen
Series:	Discussion paper series / IZA. - Bonn : IZA, ZDB-ID 2120053-1. - Vol. no. 14803
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	hdl:10419/250464 [Handle]
Classification:	G30 - Corporate Finance and Governance. General ; M12 - Personnel Management ; C78 - Bargaining Theory; Matching Theory ; C35 - Discrete Regression and Qualitative Choice Models ; d22 ; D31 - Personal Income, Wealth and Their Distributions ; J3 - Wages, Compensation, and Labor Costs
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012653095