ERIM Research Clinic: Executive Compensation
The first part of this lecture is an introduction to research on executive pay. We will review some important stylized facts, the main research questions in this field, and some of the answers to them.
In the second part, I will give an overview of my own research. I will introduce a basic model of executive compensation and explain how this model can be calibrated to the data. It turns out that some variants of the model are rejected by the data while others seem to explain executive compensation reasonably well.
Abowd, J.M., Kaplan, D.S. (1999). Executive Compensation: Six Questions That Need Answering. Journal of Economic Perspectives, 13 (4), 145-168.