The Determinants of Chief Executive Compensation in Transitional Economies: Evidence form Bulgaria

Type of Work

Article

Date

10-1996

Journal Title

Labour Economics

Journal ISSN

0927-5371

Journal Volume

3

Journal Issue

3

First Page

319

Last Page

336

DOI

10.1016/S0927-5371(96)00015-2

Abstract

Using new panel data, we present the first econometric evidence on the determinants of CEO compensation in transitional economies. Using standard specifications, CEO pay is found to be positively related to size, but not to profitability. In specifications adapted to transitional economies, CEO compensation is found to be positively related to size and productivity. The estimated pay elasticities of productivity are equal to or slightly greater than those of size, pointing to the importance of productivity as a determinant of CEO compensation in transitional economies. CEO pay is found to be more strongly tied to productivity when the firm is privatized.

Hamilton Areas of Study

Economics

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