French CEOs’ Compensations: What is the Cost of a Mandatory Upper Limit?

Article dans une revue: n the middle of the 90s, the sharp increase in globalization and the last privatization wave have promoted the shaping of a market for executives in France. Characteristics of this market are estimated for France and a competitive model is simulated in order to assess to what extent such a model can reproduce the observed chief executive officer (CEO) compensations. The size elasticity of CEOs' compensations in France is equal to 0.5 and justifies a large magnitude in compensations. To moderate these compensations, a wage cap is often called for not only by opinion and the European Left but also, more surprisingly, by representatives of shareholders. The cost of this policy is evaluated in this job assignement model and the lobbying of shareholders is investigated and explained above some thresholds.

Auteur(s)

Fabienne Llense

Revue
  • CESifo Economic Studies
Date de publication
  • 2010
Mots-clés JEL
D33 D41 J31 J33
Mots-clés
  • Wage differentials • executive compensation • regulation • superstars theory
Pages
  • 165-191
Version
  • 1
Volume
  • 56