Question A:
The typical chief executive officer of a publicly traded corporation in the U.S. is paid more than his or her marginal contribution to the firm's value.
Responses
Responses weighted by each expert's confidence
Question B:
Mandating that U.S. publicly listed corporations must allow shareholders to cast a non-binding vote on executive compensation was a good idea.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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CEOs received substantial rents, partly because pay is set by negotiation and with weak oversight. But bad CEO can do huge damage to a firm.
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 Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Bio/Vote History | ||
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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I am fairly confident that the literature is not conclusive on this for the "typical" CEO.
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 Janet Currie |
Princeton | Bio/Vote History | ||
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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Hard to test this.
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Big discrepancy between CEO compensation and long-term shareholder returns.
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 Claudia Goldin |
Harvard | Bio/Vote History | ||
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 Austan Goolsbee |
Chicago | Did Not Answer | Bio/Vote History | |
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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There are reasons to believe CEO wages = marginal product & to think they are paid more, but I'm unaware of any credible empirical evidence
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 Robert Hall |
Stanford | Bio/Vote History | ||
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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Very hard to measure MP of CEO. Harder still to assess MP of alternatives to CEO. So CEO mkt not competitive in normal sense.
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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This depends on how the CEO adds value--as a % increase on the firm's profit base or as an absolute amt. If the former, no is more likely.
-see background information here |
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Commonly asserted but it is very hard to tell. The fact that CEO pay fell during the 2000s is not widely known.
-see background information here |
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 Pete Klenow |
Stanford | Bio/Vote History | ||
 Edward Lazear |
Stanford | Bio/Vote History | ||
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Obviously, there are abuses, but the exec. market is reasonably competitive. Some contribute far more to shareholder value than their pay.
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 Jonathan Levin |
Stanford | Did Not Answer | Bio/Vote History | |
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 William Nordhaus |
Yale | Bio/Vote History | ||
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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 Cecilia Rouse |
Princeton | Bio/Vote History | ||
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I do not know enough about the empirical evidence to weigh in.
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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US CEO current pay much higher than in other countries and than in the past suggesting over-pricing
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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While trends in CEO pay may suggest this, I know of no hard evidence, particularly none that bears on the "typical" US corporation.
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 Hyun Song Shin |
Princeton | Bio/Vote History | ||
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 James Stock |
Harvard | Did Not Answer | Bio/Vote History | |
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 Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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2 Reasons: 1. Winner's curse. 2 asymetric payoffs (CEO wins when things go well and does not suffer when things go sour. Combo = overpay.
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 Christopher Udry |
Northwestern | Did Not Answer | Bio/Vote History | |
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 Luigi Zingales |
Chicago Booth | Bio/Vote History | ||
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If you had asked the question the other way (we know that they are paid their marginal valuation) I would have strongly diagreed.
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Yes, but not sufficient given that disperse shareholders may not have sufficient incentives to monitor performance.
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Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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I weakly disagree. I suspect that this requirement is ineffective -- so it silences some critics without solving any agency problems.
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Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Raj Chetty |
Harvard | Bio/Vote History | ||
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Judith Chevalier |
Yale | Bio/Vote History | ||
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I don't think this policy will do much though their have been a few high profile institution-led No votes on these resolutions.
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Janet Currie |
Princeton | Bio/Vote History | ||
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David Cutler |
Harvard | Bio/Vote History | ||
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I don't know if it affected pay, but shareholders should have the right to express some view on this.
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Seems to have had little effect so far. Gives stockholders potentially more power at probably low costs of administering it.
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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"Non-binding" means the mandate has no teeth
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Claudia Goldin |
Harvard | Bio/Vote History | ||
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Austan Goolsbee |
Chicago | Did Not Answer | Bio/Vote History | |
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Difficult to see harm but there is plenty of evidence that more sunshine can improve firm performance. See below link for an example
-see background information here |
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Robert Hall |
Stanford | Bio/Vote History | ||
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Ex ante, giving management a significant stake in a company has its logic, so cutting the payoff ex post may be a problem.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Direct shareholder intervention has benefits as well as costs. Costs much underappreciated in current climate. Still, some oversight needed.
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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The vote is good for governance, but mandating it is not. If you don't like how executives are paid, sell the shares.
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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We know that it does not seemed to have changed outcomes much so far. Does take up some resources, but the threat might wind up being ok.
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Edward Lazear |
Stanford | Bio/Vote History | ||
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Mandates are not necessary. Potential shareholders do not have to own shares in companies whose corp gov is not to their liking.
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Jonathan Levin |
Stanford | Did Not Answer | Bio/Vote History | |
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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Cecilia Rouse |
Princeton | Bio/Vote History | ||
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Sounds like a good idea in theory, but I do not know enough about implementation to weigh in.
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Unlikely to have a strong impact
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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It is hard to see how a non-binding vote by generally uninformed shareholders is likely to have benefits exceeding its coss.
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Hyun Song Shin |
Princeton | Bio/Vote History | ||
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James Stock |
Harvard | Did Not Answer | Bio/Vote History | |
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Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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More transparency is good. Better would be to require disclosure of the process consultants use to set pay. Benchmarking is anit market.
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Christopher Udry |
Northwestern | Did Not Answer | Bio/Vote History | |
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Luigi Zingales |
Chicago Booth | Bio/Vote History | ||
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The cost is minimal, while the benefit of transparency and societal pressure against excesses high.
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